President Yoweri Museveni has called upon the Uganda Revenue Authority (URA) to fill up the tax gaps so that the country can gain financial independence and stop borrowing money to finance its budget.
The President made the remarks at the first Science Model Workshop organized by URA and Africa Tax Administration Forum (ATAF) at Speke Resort Munyonyo, in Kampala.
The President said that for the last 600 years, Africans have been under one form of slavery or another. First, he said, was the slave trade that started as soon as the Portuguese got to the current Sierra Leone.
"That slavery went on for almost 400 years until 1822 when slave trade was abolished in Europe by legislation," he said.
He added that soon after the abolition of slave trade, Africa, apart from Ethiopia, was colonized following the Berlin Conference.
"Even after independence, Africa is still under slavery in form of neo-colonialism due to insufficient resources where countries have to run their economies through begging," he said.
President Museveni, therefore, called for tax collection in Africa to be an instrument of liberation. He said that borrowing money has limited the growth of Africa and made Africa lose respect and money.
"We do not collect enough taxes and have budgets from begging. When you borrow, you lose both respect and money as you pay back more than you borrowed. If you pay with your own money for road construction, you only pay for the cost of the road but if you borrow, you must pay interest too," he said.
He added that it was a shame for Africa to be known as a continent of beggars after 5 million years of the existence of the human race.
"Even the most primitive societies depend on themselves: animals hunt and use the skin as clothing but Africa for the first time in human history, is still is a continent of people acknowledged as beggars," he said.
The President identified eight ways the Uganda Revenue Authority can use to ensure that people do not avoid taxes. These include use of scanners, electronic monitoring and stamping of goods from the factory of origin, electronic monitoring of telecoms, monitoring of electronic money transfers, input-output analysis, chemical analysis, head-mapping of the real estate sector and monitoring shop. The President said that URA should ensure that all entry posts namely land, railways and airports have scanners linked to the authority's system. He added that goods coming into the country should have stamps from the factory of origin so that the authority can know the quality and value and tax accordingly.
On electronic money transfers, the President advised URA not to leave the role only to the Central Bank.
President Museveni also warned the real estate sector against colluding with tax collection officers and town planners to avoid taxes.
"We know the market rate of renting property on different streets or areas and the number of houses in the area. If the houses were on Mars, I would understand if URA failed to get the number because it is too far," he said.
The President also said the tax collectors should be vigilant with owners of buildings who evade tax by exploiting the law that allows property owners who stay in a building not to pay taxes. He said that the tax collectors should verify that information before exempting owners of buildings from taxes.
Mr. Logan Wart, the ATAF Executive Secretary, thanked URA for its great innovation and first step towards using science in enhancing tax compliance and increasing revenue contributions.
"URA continues to be a trendsetter and the science model is in character with URA's history of leading by example and embracing change. This can be seen from their role in the formation of the ATAF as a body to build tax administration capacity on the continent as a way of increasing efficiency in revenue mobilization to improve the livelihood of Africans and we, in our continents, wean off Aid," he said.
The Minister of Finance and Economic Planning, Mr. Matia Kasaija, said that government would continue to support Uganda Revenue Authority to acquire the skills and equipment needed to fill-in gaps that lead to tax avoidance.
"Without taxes, I cannot have a job to do, run the economy and government would not be able to deliver the services it promised to Ugandans," he said.
The URA's Acting Commissioner General, Mr. Patrick Mukiibi, said the Authority has made deliberate efforts to embrace and leverage possible avenues to enhance tax compliance and expand Uganda's tax base.
"It has become very clear that science is going to become one of the most important pillars of revenue administrations in order to match the deliberate strategic shift by majority of the African countries to become industrialized," he said. The workshop was held under the theme: 'The Evolution of Science in Tax Administration'.
ATAF started in November 2009 with 15 members. It has grown to a 38-member organization delivering capacity building programmes in tax administrations in at least 20 of those countries, through technical assistance programmes, training and research that feeds into needs of African Revenue Authorities. ATAF also continues as a voice of Africa in global fora on tax matters facilitating African administrations to participate in setting global standards.