Julius Mukunda, the Executive Director of the Civil Society Budget Advocacy Group (CSBAG) said that money can be refunded if an investigation by the Inspector General of Government (IGG) is done and the said beneficiaries are made to account.
Civil Society Organizations
(CSOs) have asked the government to put in place a robust tax arrears refund
system to guard against monies paid out to businesses in error by Uganda
Revenue Authority (URA).
This call comes after the Auditor
General noted anomalies in the refund process whereby they revealed that there
are taxpayers who received tax refunds when they still had outstanding tax
obligations to the tune of 2 billion Shillings. This was pointed out in his f December 2019 report.
The Income Tax Act requires the
Commissioner General of URA to issue a tax refund on grounds that the affected taxpayer doesn’t have any outstanding liability. The refund arises from the 18
per cent, Value Added Tax (VAT) charge, levied at every stage of a product's manufacturing. This is supposed to be refunded when the product is exported.
But the Executive Director of the
Civil Society Budget Advocacy Group (CSBAG) Julius Mukunda says that the way it’s
currently done denies government the much-needed revenue and also leads to
gross revenue shortfalls.
Mukunda says that the money can
be refunded if an investigation by the Inspector General of Government (IGG) is
done and the said beneficiaries are made to account.
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At the annual trade show last year,
manufacturers reported to President Museveni that the tax body delays issuing
them their money, something the president said affects business because manufacturers
find problems with money to invest back when it is being held by URA.
Julius Kapwepwe, the Director of Programmes at Uganda Debt
Network said URA should be tapping into new enterprises that are making money
but are not contributing as much to tax revenue.
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Patrick Batabazi of the policy
Think Tank, Center for Budget and Tax Policy says that the economy is expanding
but that is not being reflected in the numbers because of anomalies in tax
administration such as failure to establish what exactly should be paid in refunds
and who should or shouldn’t be paying tax.
He says over the last five years
of National Development Plan II, URA has surpassed its target only once in
financial year 2018/19.
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For him, many taxpayers who haven’t fulfilled their obligations
actually got refunds last financial year.