Will URA’s new interactive interface enable efficiency?

Uganda Revenue Authority has introduced a new website interface aimed at enabling efficient interaction between taxpayers, stakeholders and the revenue collection body.

The website was launched as an enhanced initiative to increase tax compliance by enabling taxpayers to use simplified mechanisms to comply with tax laws by timeously filing returns, making payments and obtaining tax literacy information from the source.

On October 14, 2023, the Uganda Revenue Authority, in conjunction with the ministry of Finance, launched a three-year digital strategy in partnership with United Nations Development Programme with an aim of integrating technology in tax administration.

This strategy, according to the revenue body, shall enable the automation of tax processes, quality assurance and eventually help in mitigating tax leakages.

The launch was followed by a public notice issued on October 25 with URA informing the general public of the rollout of new electronic services. In as much as this rollout created a temporary network outage that disrupted the traffic flow of information, tax payments and other activities, the new website interface was easily welcomed by several taxpayers.

One of the key principles of good taxation system as postulated by Adam Smith in 1776 is that tax should be conveniently collected. This principle, as well as other principles of certainty, fairness and efficiency, is what the revenue body will achieve once the new web-based interface becomes fully functional.

This is because the new system will enable taxpayers to conveniently pay their tax dues, file returns, and even obtain other benefits from the authority without the hustle and bustle of lining up at its Nakawa-based offices in order to obtain services. Taxpayer benefits like refunds, tax clearance certificates, credit and notes will be easily obtained.

Surprisingly, the web portal contains an option to use a preferred language of choice while interacting with it. This will accord semi-literate and illiterate taxpayers an opportunity to use the platform without obtaining expertise from tax agents who have been notorious of charging exorbitant prices to help taxpayers in interacting with URA on the previous e-tax portal.

In 2009, URA introduced an e-tax portal as a web-based tax filing and payment system designed to reduce the cumbersome manual process, curtail tax evasion and boost domestic revenue collection that had been a burden during the days of the infamous graduated tax.

The strides that were taken because of the introduction of this electronic system enabled Uganda to achieve a relatively high tax-to-GDP ratio of 14 per cent as it currently stands. It is hoped that the new system will eventually contribute to the progress being made towards Uganda attaining economic independence and achieving the long-term goal of a 20 per cent tax-to-GDP ratio as stated by Matia Kasaija, the minister of Finance, during the launch of the digitalization strategy.

The 2009 e-tax portal had its own challenges. For example, Uganda operates a self-assessment tax system whereby taxpayers are obliged to assess their businesses and self-declare the proceeds to URA to enable a computation of taxes to be made. This system would, however, lead to a lot of under declaration of incomes and sales especially at the stage of filing returns.

With the new website portal, an interlinkage between the taxpayers’ Electronic Fiscal Receipting and Invoicing System (EFRIS) declarations and their returns has been made such that a taxpayer will not be required to manually input their sales or purchases while filing returns.

The integrated system will automatically fill the returns with data from the EFRIS invoices issued by the taxpayer. This will replace the MS excel return form for tax periods commencing November 1. In other words, VAT returns filed subsequently after November 1 shall be pre-filled with existing data from the EFRIS invoices.

This is likely to reduce revenue leakages resulting from under-declarations. For this web-based portal to effectively operate, it is pertinent that taxpayers are taken through the processes of its operations since they will be its greatest users. This will also enable URA to effectively obtain the necessary feedback and make appropriate adjustments to it.

The key features that the system introduces include a simplified taxpayer ledger that summarizes a taxpayer’s transactions and tax balances for each tax head whilst clearly laying out the principal tax due, penal tax and interest outstanding in an orderly manner.

A requirement to have taxpayer’s data interlinked with information from URSB for companies and NIRA for individuals has also been incorporated. Existing taxpayers will be required to update their tax identification details to include their business registration numbers and national identification numbers respectively.

Where the taxpayer’s information doesn’t match that provided at either URSB or NIRA, difficulties will arise in the TIN application until the details are matching. The advantage of this is that it will enable URA to obtain information from its sister bodies with ease and taxpayers’ will not suffer the burden of running back and forth from different regulatory bodies to obtain services.

Taxpayers, therefore, ought to embrace this new website interface as it eases their interactions with URA.

The writer is an advocate of the High court and a tax expert.