Doris Akol was recently appointed Commissioner General of Uganda Revenue Authority (URA), succeeding Allen Kagina, who retired after ten years in the job. She spoke to Julius Businge about her experiences so far, her vision, plus other issues pertinent to tax administration. Excerpts.
Barely a fortnight in your new job what are your impressions?
It has been quite exciting, busy. We have been spreading our message on the focus areas. We want to increase stakeholder partnerships including the media, tax education amongst our tax payers, which will all improve compliance. We believe most of Ugandans are law abiding citizens and so, if they are educated about tax matters, it is easy for them to comply. We are also looking at improving our service solutions. We will continue to invest in our information technology systems to facilitate e-tax and other innovations we have.
Already you have been at URA for the past 19 years. What are your impressions?
We have seen URA change over the years. It started as high-handed arbitrary institution, which was not in touch with the clients but we have seen that change. We have also seen some change management issues among staff. However, building on what my experience has been in 19 years, I can say I have seen URA grow just as any child grows. When I joined, URA was only four years and now we are 23 years old. Of course the problems we had at the beginning are not the ones we are having today. We used to collect cash using manual systems. Now, taxpayers pay through banks and our systems are fully automated. We have also seen power barriers broken. For example in the URA of 1995 up to 2004, the CG had his own staircase and no one else was allowed to use it. But things have changed a CG is like any staff member who can interact with anyone anytime. On managing some of these challenges, like I said, building on the changes in culture we have talked about is important. URA should exist because the tax payers are there working with an institution that they are proud of. We will strengthen our brand and continue to be part of the community.
Some people say managing people you have served with almost at the same level is challenging. What is your take?
I don’t not believe that will be one of the challenges I will face. We have grown very g relationships, we are friends and we do work as colleagues in this office. We have all served in acting capacity in the office of CG before and all of us were given full support. When the position fell vacant, we chose to rally around each other to ensure that at least the new CG comes from among us. Even though I competed with them and I came out as winner, there has not been any hard feeling amongst my colleagues and we are working as a team to take URA forward.
What management principles are necessarily for a CG?
Leadership is all about influence. When it comes to task execution, depending on the circumstances and the people you are working with, you might have to delegate if it is a hard situation that requires immediate direction, then you have to come in and give direction. We work in a scenario of technical competence. All these people have the expertise and right answers for this organization. You must create an environment where people must work together and make sure that your team remains accountable for the output.
What in your view should motivate Ugandans to be tax compliant?
This country is ours. There is no way we can yearn for development if we don’t take responsibility for developing it ourselves. I have travelled to many parts across the world and I have seen good things happening there in terms of development. So it is better for all of us to play our part. That kind of development and lifestyle we all want comes after we have paid your taxes voluntarily. By knowing that it is a civic duty to pay taxes then we will be on the road to getting out of dependence. If we don’t pay our taxes we will be cheating ourselves, frustrating ourselves and we should not be the ones to complain if things are not going on well. The government has done a lot in cleaning up public expenditure to avoid wastage and losses but also to provide accountability. Right now in the Ministry of Finance you are able to log on the budget website and see how the money is being spent. The reports we see in the media about money being wasted are given more prominence than the other good, inspirational stories. We would like to see a significant amount of stories in the media on what tax payers’ money has done.When you pay your taxes 100%, then you have the moral obligation and the right to hold your government to account.
One of Uganda’s tax problems is a stagnation of the tax-to-GDP ratio at 13% largely because the informal sector has remained informal. How do you plan to manage that?
It will take a change of mindset about the culture of paying taxes. Once that happens even all these other instruments we deploy will become less important. However, when that doesn’t work, we have to work with the business associations in which all these people are doing business, working together with local authorities who issue them with licenses. But once the culture of registering all businesses takes route and it becomes difficult for you to do business without registration that will break the informality within the informal sector. We have started on some of these and it is work in progress, we are hoping that it will be sooner rather than later. The national ID database will help a lot. The tax payer and registration programme in Kampala, which will be extended in other busy commercial areas, among other avenues will help us a lot. We know that the informal sector thrives on being undetected and once we remove that cover on detection we will grow the tax-to-GDP ratio. Ugandans should know there are many benefits that come with a formalized business. You will not know how much you are making in terms of profits when you do not have proper records or no records at all. Formalizing a business paves way for its growth. It is beyond taxation.
What is your projection of the future performance of international trade taxes in comparison with domestic taxes?
The future is certainly in domestic revenue mobilization. This is not just a case for Uganda it is world over. We are or have entered regional integration blocs. The EAC has already led to a significant revenue drop in revenue because of the implementation of the customs union protocol. We have so many blocs we are going to join COMESA Free Trade Area, the IGAD zone, the proposed African Union Free Trade Area, all these will reduce international trade revenue. The good thing is that domestic revenue has already overtaken international trade taxes. International trade taxes are currently at around 48% meaning domestic taxes are accounting for over 50% of contribution to revenue. International trade taxes will continue dwindling as domestic taxes continue to rise. The focus on international taxes will be for facilitation to make sure that trade is being done smoothly across borders without any barriers. Actually having domestic taxes performing gly means that your economy is g and that is good.
What would you say are the challenges facing tax administration bodies within the region?
The challenges for the region are the same. They face perhaps even bigger challenges in having a bigger informal sector than we do. For instance, Kenya and Tanzania have a bigger informal sector than Uganda. We all have problems regarding tax planning multinationals who come to do business in the region but repatriate the money and they deploy very intricate tax planning schemes, which makes it very difficult to tax those entities. The other challenges are about low compliance, smuggling and dumping all of which are issues we all have to deal with in the region. We are not at the same level of capacity to deal with challenges related to e-commerce but like I said we have the East African Commissioner Generals platform to deal with these challenges and we are hopeful we will manage.
How prepared is Uganda when it comes to tax harmonization policies within the EAC region?
We have started on harmonization of regimes. On income tax, we are trying to harmonize double taxation agreement. We are also looking at harmonizing VAT in the region. This is good but we are not at the same level but it is a direction that seems to have taken route and there are technical teams to work on this. In some areas we are not yet ready but tradeoffs are made to ensure that we all go at the same level. Our income tax rate is at 30% across the region and that means we have been cooperating in the past.
What lessons can Uganda learn from successful tax bodies in the world?
Leadership is critical for any successful tax authority. But this alone can’t work when you don’t have high compliance rates. For instance, in the US and maybe in the UK, to think that you will not comply with taxes is like committing suicide and people meet their tax obligations on time. Being client-centric is also key and a high level of enforcement plus partnerships among others have made successful tax bodies be what they are at the moment.
The government’s ambitious plan is to raise and fund almost the entire national budget using revenues mobilized locally. Does this stress you?
It doesn’t bother me so much because it is a job that must be done and it is a job that can be done. This is being ambitious but attainable because the money is there. There is a lot of money that we are supposed to collect and which we are not collecting. If this money were to come in, all these targets that seem to be ambitious would be realistic. Our job would be to provide information to the majority of Ugandans who are actually willing to pay taxes but just don’t know how to do it.
Where, in your view, is the potential for this economy in light of the ever-growing revenue targets set year-on-year?
Taxation is a pulse point on the performance of the economy. The way taxes perform is a direct reflection of how the economy is performing. However, our economy is one of those that are growing but we still have issues to overcome-productive work forces, under capacity human resource are some of them. The service sector is continuing to expand to overtake most of the sectors, which is good. We see infrastructure development, which will facilitate the ease of doing business and we will see the ripple effects. We also have the huge potential in the agriculture sector and oil and gas. These sectors once formalized – especially agriculture – will drive the growth of this economy.
And finally, where do you want to see URA in the next five or so years?
URA will be much ger vessel through which this country will be delivered out of dependence. We will generate revenue at a minimum of 100% of our budget. So we will cover our budget needs and possibly have a surplus left for future investment.
Source : The Independent