A mutual interaction between Uganda Revenue Authority (URA) and Kampala traders is set to increase, thanks to a new management system.
Previously, this interaction was largely restricted to audit visits at traders’ premises, enforcement on failure to comply and the occasional assistance obtained by visiting URA offices.
To change that, and ensure benefits for taxpayers and URA, the Domestic Taxes (DT) department recently introduced the Block Management System (BMS).
In this system, the central business district and nearby areas were divided into 13 blocks, each of which is demarcated by streets and key buildings in Kampala Metropolitan and surrounding areas.
Each block was allocated a supervisor and a number of staff depending on the size and level of economic activity in the block.
Explaining the strategy, DT Commissioner, Henry Saka, said it involved the segmentation of small taxpayers according to their defined geographic locations, which are called blocks.
“In these blocks, a team of tax officers is assigned to systematically manage tax compliance of each taxpayer on a day-to-day basis. The blocks are fairly small and will enable tax officers to undertake door-to-door visits to all businesses,” Saka said.
BMS is part of the continuous effort to bridge the gap between taxpayers and URA.
“We must purpose to better understand our client’s business and then tailor solutions that are better matched to meet these needs,” Saka noted.
“We must provide better services to our clients, better returns filing services, better assessments, better payment services and handle their queries expeditiously.”
The Block Management System commenced on August 1, 2017 and is being piloted in Kampala Metropolitan, according to Saka. Thereafter, it will be rolled out to other regions of the country.
Phase one of the BMS covers stretches to city suburbs namely Bukesa, Mengo, Kamwokya, Jinja Road, Lugogo and all areas within that ‘boundary.’ They include Kitante, Kisenyi, Kololo, Nakasero, the central business district and Kikuubo, a busy trading hub in so-called downtown Kampala.
Easing provision of taxpayer services, which will include tax advice and intensive taxpayer education (seminars/workshops) on the rights and obligations of taxpayers in the designated blocks are among the benefits to taxpayers.
“Based on the ‘know-your-customer’ concept, we will seek to know all taxpayer activities taking place in each block in order to identify taxpayers’ needs and gather valuable information so that equitable and correct tax assessments can be made,” Saka explained.
On the other hand, URA would be able to identify and register all eligible taxpayers operating on a block and undertake tax compliance checks to establish the nature of business.
Other benefits to URA are ensuring that taxpayers comply with tax obligations, due dates and all tax laws. The BMS is additionally expected to facilitate seamless transition to the use of Electronic Fiscal Devices (EFDs) since there will be close monitoring of all taxpayers within a block.
According to Saka, it is part of internal efficiencies meant to boost the department’s performance. World over, as international trade, which is vulnerable to “external pressures” declines, countries are focusing more on domestic taxes, and Uganda is no exception.
Last financial year 2016/17, Domestic Taxes collected a total of Shs 7.4 trillion, an excellent performance the department wants to sustain over the coming years.
BMS comes on the heels of other activities meant to ease compliance and ultimately ensure efficiency.
These include opening up offices in rapidly growing centres such as Kyaliwajala ‒ close to Namugongo ‒ and Nansana in Kampala, Kyotera ‒ along the Masaka-Mutukula highway ‒ and Ibanda in western Uganda. In the pipeline is an office in Nateete, a rapidly expanding and busy Kampala suburb.
The writer works with Uganda Revenue Authority’s Public & Corporate Affairs division.