The Uganda Revenue Authority (URA) has said the slow disposal rate of cases in local courts has led to low revenue collection and affected taxpayers’ businesses.
Acting Commissioner General, Henry Saka says over Shillings one trillion in taxes is held up in numerous tax lawsuits pending before courts of law.
“Expeditious disposal of cases will reduce URA’s arrears in collectable taxes, pending adjudication in the courts and Tax Appeals Tribunal, from over Shillingh1 trillion to a lower figure,” he said Thursday at the opening of a two-day taxation training for judges of the High Court and members of the Tax Appeals Tribunal (TAT). The training that ended this evening at Lake Victoria Serena, Kigo, Wakiso District.
The judges’ conference was organised by URA in partnership with the Judicial Training Institute under the theme: ‘Current Developments in Tax Law, Practice and Administration.’
Areas discussed included; illicit financial flows and their impact on the economy, the role of the Financial Intelligence Authority in combating crime, offence management under the customs processes, Value Added Tax fraud and invoice trading among others.
According to Saka, there is an increase in the number of ex-parte and inter-party interim orders issued against the tax body. These have delayed revenue collection and service delivery.
Saka at the meeting said from January 2016 to date, URA has been served with several interim orders that have halted the collection of over Sh550.2 billion, adding that the institution’s bank accounts have been attached, affecting work and remittance to the consolidate fund.
He said URA has also received numerous orders instructing them to release uncustomed goods or lift third party agency notices without any form of security for the unpaid taxes deposited with URA or the court.
“Many times such taxpayers eventually go underground and are hard to trace in case of future collections,” he said adding that it was concern given that URA collects revenue to support government programs and budget.
Saka also said taxpayers are now devising new ways of evading tax. Some file cases and later abandon them after achieving their goals, while others rush to the High Court for injunctions instead of following the normal procedure of first petitioning the TAT.
The last financial year saw URA collect Sh12.7 trillion in taxes and so far it has collected Shs8 trillion out of a target of Shs15.4trillion for the current financial year that ends in June 2018.
Justice Henry Peter Adonyo, the director Judicial Training Institute, said there was need for key stakeholders in the taxation sector to understand the role of Uganda’s tax system and the role of it plays in economic development.
A country’s ability to realise its own revenue is one of the key tenets of independence and economic development, he said.
Deputy Chief Justice, Alfonse Owiny-Dollo said the tax challenges that URA faces are a challenge to tax authorities worldwide. Judges, he said, could reduce URA’s burden by expediting court cases.
The role of courts of law, he stressed, is to contribute to the realisation of tax compliance through development through development of tax jurisprudence and sanctioning of tax evaders, while also having the insight to detect aggressive tax planning bordering on tax evasion.
“To do that, all judicial officers must not only have a sound understanding of the tax laws of Uganda, but must keep themselves abreast with developments in tax jurisprudence here and in other Commonwealth countries,” he said.
Justice Owiny-Dollo said that although judges are expected to be knowledgeable on every subject, not all are grounded on taxation matters and the tax system and hence need training.
