According to statistics from the Uganda Revenue Authority (URA) Annual Data Book 2018/19, at 12.44%, Uganda’s average tax to GDP ratio over the last five years is one of the lowest in the region, and far below the sub-Saharan Africa average of 16%. Simply put, the total tax collected by URA has on average over the past five years accounted for only 12.44% of the size of Uganda’s economy. Comparatively, Kenya, Tanzania, Rwanda and Burundi recorded average tax to GDP ratios of 16.10%, 12.83%, 15.80% and 13.55% respectively over the same period.
This should not come as a surprise, given that 2016 statistics from the Uganda Bureau of Statistics (UBOS) indicated that approximately 98% of Uganda’s population of working age (14-64) were engaged in the informal sector. The title of a 2017 article published by the Economic Policy Research Centre (EPRC) based on the same statistics put it aptly, “Informality Growing Faster than Formality”.
Expanding the tax base by tapping into semi-formal economic activities is going to be one of the major focus areas in the Third National Development Plan (NDPIII) 2020/21-2024/25. It is against this background that researchers in the College of Business and Management Sciences (CoBAMS) led by the Principal, Dr. Eria Hisali conducted a study that sought to understand which gaps exist in tax education and how these gaps can be packaged into improving compliance and subsequently broadening the tax base in Uganda.
Funded by the Government of Uganda through the Makerere University Research and Innovations Fund (Mak-RIF) the research undertaken in 2020 targeted over 500 respondents with particular focus on the informal sector. In addition to the Principal Investigator (PI) Dr. Eria Hisali, the research team consisted of Dr. Ismail Kintu, Dr. Fred Bateganya, Ms. Marion Atukunda, Ms. Winfred Nalwoga, Mr. Nicholas Musoke, Mr. Patrick Lumala and Dr. Kagarura Willy.
Speaking at the research dissemination workshop held on 10th February 2021 in the School of Business Conference Room, Dr. Hisali shared that “The research advocates for a comprehensive review of Uganda Revenue Authority’s tax education programme with focus on linking tax collection to better service delivery,”
The research team’s interaction with members of the informal sector revealed that tax education being provided is not well suited to the informal sector. “For instance, tax exhibitions, messages on websites and brochures do not provide the best approach to reach out to the informal sector. The informal sector needs more engagement with emphasis on field visits and face-to-face interaction,” explained Dr. Hisali.
The Principal Investigator however pointed to some quick wins that could be adopted as URA evaluates and updates its tax education programme. He noted that approximately UGX 6 Trillion had been allocated to livelihood programmes by the Government of Uganda between the 2018/19 and current financial years. “How can tax education be included as part of the package that these Government livelihood programmes contain? I think we could see some quick wins because as recipients benefit from livelihood programmes, they could be asked to register as tax payers.”
Findings shared by the research team further revealed a limited coverage of tax education. Whereas 53% had been told or heard about the importance of paying taxes, only 40% had received education on how to register for taxes while only 38% had heard about filing tax returns. Furthermore, only 32% had received tax education on fines and penalties, 29% on the benefits of paying taxes and only 16% on audits and assessments.
Nevertheless, some of the registered respondents who admitted to not paying taxes cited low tax morale as well as poor service delivery and unfairness as reasons for their noncompliance. Researchers further took note of the limited personal touch with potential taxpayers in the informal sector, disconnect between the current taxpayer education modality and unique features of the informal sector, as well as the cost implications and overly technical language in existing modalities as some of the reasons for nonpayment of taxes.
The Study concluded that:
- Majority of the respondents had limited or no knowledge about the Tax Identification Number (TIN), a critical requirement for tax payment. More than half of respondents did not know how to acquire a TIN.
- Actors in the informal sector cannot differentiate between taxes paid to URA and those paid to local governments and other bodies that bring together operators.
- Most respondents did not know how to formalize their business/enterprise, another important factor for tax registration.
- There exists some form of registration of informal businesses/enterprises upon which formalization can build.
- The URA tax education campaigns messaging and targeting has left out some potential tax payers. Messaging and targeting of tax education is key to realizing intended results of growing the tax base and ultimately the tax revenues.
The Research Dissemination attracted participants from URA, Kampala City Traders Association (KACITA), Academia, Private Sector, Civil Society, the Media, Mak-RIF Grants Management Committee (GMC) as well as staff and students from Makerere University.
Painting a picture on the new ideas and innovations to foster a taxpaying culture through tax education, URA’s Mr. Nicholas Musoke who represented the Assistant Commissioner Research Planning and Development-Ms. Milly Nalukwago, noted that whereas Uganda’s population is approximately 45.7million, the taxpayer register stands at only 1.59million. Approximately 953,000 of those registered are active taxpayers, while 906 URA clients pay 80% of the tax. The informal sector currently contributes less than 1% (0.03%) of tax collected.
To help achieve this, URA plans to roll out the AEN strategy. AEN stands for Awareness, Empower and Nurture. Under Awareness, URA intends to intentionally engage the public on tax laws, roles, rights, obligations and opportunities relating to tax. Under Empower, URA will guide taxpayers on their rights as well as how and when to fulfil their tax obligations, while under Nurture, the Authority will set up and support mechanisms to cultivate and maintain a taxpaying culture.
Dr. John Mutenyo who represented the Chairperson of MakRIF GMC- Prof. William Bazeyo in his address commended the Government of Uganda for prioritizing research at Makerere University. “In phase One of Mak-RIF, the Government committed UGX 30billion and this was one of the research projects that
was funded under that phase. To date, over 500 competitive research grants have been supported.”
Prof. Bazeyo congratulated Dr. Hisali and the entire research team for undertaking a study geared towards strengthening the implementation of NDPIII and supporting the development of Uganda. “Most importantly, I would like to thank Dr. Hisali and the team for having a collaborative study that involved the key stakeholders such as URA. These are the stakeholders that are going to make it easy to buy into and implement the outcomes of this research.”
Commenting on the findings, the other stakeholders at the research dissemination workshop pointed out the need to embark on trust building programmes with the taxpayer. They equally emphasised the need to consider reducing the load on the tax payer. The taxpayer in Uganda is subject to taxes such as;
Value Added Tax (VAT), Pay As You Earn (PAYE), Customs, Demurrage, Income Tax, Withholding Tax, Excise Duty, Over-The-Top (OTT)/Social Media Tax among others.
Article by Public Relations Office
Makerere Innovations Hub celebrates Persons living with Disabilities
Makerere University Innovations Hub has commemorated the international day for persons living with disabilities by celebrating these young innovators.
The celebrations were held at Makerere University in the Yusuf Lule Teaching Facility-Auditorium on December 01.
The persons living with disabilities showcased different skills in shoe making, soap making, bracelets making, weaving among others, parading their items they make to earn a living.
Makerere University Innovations Hub started up a project last year dubbed, “Innovativeness of Young Persons with Disabilities in Uganda” to support them in discovering their skills and help them to start a journey to economic empowerment. The programme is sponsored by the Royal Academy of Engineering, a UK based agency.
Dr Cathy Mbidde, the Principal Investigator (PI) of this programme, said she conceived the idea in December 2022 from a class assignment that she gave to students to go into the community and identify problems.
“I wanted them to go and find problems in the community to start a business. So they identified a few problems but one of the groups of students had a disabled person and she was struggling as they were arguing how to develop the product. That is how I realized that I can do something to impact people with disabilities,” she said
Dr Mbidde said she took a step to initiate a programme that can keep these persons busy and at the same time start up some businesses convenient for them to do.
“In December last year, there was a call from the Royal Academy of Engineering providing grants and I wrote and won the Frontiers Champions grant of around Shs42 million to organize an event,” she said.
She says one of the objectives of this programme was to identify persons living with disabilities who are innovative.
“How are they able to maneuver and start an enterprise or do some kind of business in an innovative way. I also wanted to look for stakeholders who can support them to execute their innovativeness,” she said.
The PI wanted to get for them a platform where they can come together and share experiences.
During the initial stages of the programme, Dr Mbidde went out to the field and made research about persons living with disabilities. She identified a few things that they needed including decent housing after noting that some of them were living in houses which could not accommodate them.
She also found out that these people lacked school fees to take their children to school and something needed to be done to see a way to bail them out of this situation.
“They had the skills but did not have the resources, we therefore came up and picked 15 persons during our pilot study of one year,” she said.
Dr Mbidde partners with different agencies and organizations to pave a way of helping skilled persons living with disabilities.
Ms Penninah Nakandi, one of the persons living with disabilities who doubles as the Executive Director of Persons with disabilities in Business Uganda (PIB-UG) said she empowers youth and mothers of children living with disabilities through an economic skilling programme.
“We believed that after dropping papers of applications seeking for jobs and people at times don’t even respond to us, we decided to startup that initiative and we have moved a long way because we have a total of 55 members,” she said adding that PIB-UG offers mentorship and empowers people to work as a team.
Mr Gerald Sunday, the Centenary Bank branch manager at Makerere said they have special packages for PWDs who are doing private businesses, small scale cottage businesses like those doing tailoring, liquid soap making, shoe making among others.
“We invite them to come for startup capital. We have youth negotiable loans at 16 percent per annum right from shs50,000 up to shs5 million as long as they qualify and are in the age bracket of the youth,” he said.
Mr Edwin Leroy, the Operations manager at Isitoshe Tours and Travel company, which mostly deals with people living disabilities in touring services said most of these people have been left behind but they have now embarked on helping them to engage in different job opportunities.
“We want to take the initiative to be part of this programme to see that the persons living with disabilities can exercise their skills and at the end of the day, they can improve their well-being,” he said.
He added: “We want to help them to engage in different activities that can generate income for them and equally participate and compete with all other people that do not have disabilities.”
Makerere University hosts CSAE Economic Development workshop 2023
Makerere University has hosted this year’s Center for the Study of African Economies (CSAE) workshop that brings together scholars across the world.
The workshop started on November 27and is expected to run up to November 30 at Makerere University Yusuf Lule Central Teaching Facility II (CTF).
The Center has brought together economic scholars from Africa, Europe, North America, and Asia among others to discuss how the economy of Africa can be developed through conducting research.
According to Prof Eria Hisali, the Principal of the College of Business and Management Sciences (CoBAMS), they are looking at scholars doing research to the extent that it can help them to understand the problems hindering development, understanding the obstacles and finding the correct solutions to the development of the African countries.
“Researchers are presenting their research to get advice, get room for improvement and pave a way of translating the research finding into policies,” he said.
He noted that it is a great opportunity for researchers from different universities both on the African continent and outside the continent to present the work that they are doing and to understand the economies of the different countries.
This years’ conference is attended by about 40 speakers on the continent and around 10 speakers from Europe, Asia, and North America, Canada among others discussing different areas that are relevant to understanding the economies.
These include the Natural resources and environmental misuse, fiscal policies and monetary policies, agriculture, inequality and poverty and trade and structural transformation among others.
Prof Hisali said Uganda’s problems arise from her structural formation but there is need to look beyond just the physical problems like poverty and unemployment and establish the root cause of that.
“It is true we have unemployment in Uganda and we still need to grapple with issues of poverty but we need to appreciate that unemployment, poverty among others are not the primary problems, they are actually effects of certain underlying problems. So, we want researchers to understand what explains unemployment as we see it,” he explained.
Prof Stefan Dercon, the Professor of Economic Policy at the University of Oxford who doubles as the Director of CSAE revealed that African researchers need to improve the quality of their work and create avenues for associating with policy makers to appreciate their work for the development of their economies.
“Scholars are presenting their research and we give them feedback, share knowledge and learn from each other. A lot of research is still academic because we don’t create space for advisors. Very many economists are not good translators of research not only in Uganda but throughout the world,” he noted.
Prof Ibrahim Mike Okumu, the Dean of the School of Economics said this forum brings together scholars to discuss issues of the African economy among their colleagues who appreciate the African context saying, “They are here for quality checks. We have an opportunity to improve the quality of research papers that scholars across the African continent have developed. By improving the quality, we are trying to get authenticity, proof that the methodologies, the quality of analysis that we have is of standard and consequently we can have credibility regarding policy recommendation that will come from research papers.”
African scholars have come from Cameroon, Morocco, Ethiopia, Kenya, South Africa, Nigeria, and Botswana among others…
He re-echoed the message from the Principal concerning the problems affecting Uganda noting that they are not unique to Uganda, she (Uganda) is just struggling with sluggish structural transformation and that is the transition from agriculture to industry which he says is the same story across Africa.
“For as long as industries are not able to create sufficient jobs, the economy cannot pick up because the industry is what moves agriculture forward and is what gives business to the service sector. For as long as industry is not robust enough then you tend to have weak service and agricultural sectors,” he emphasized.
Dr Oluwabunmi Adejumo, a senior lecturer at Obafeemi Awolowo University in Nigeria who is conducting research on the clashes between herders and farmers from different states of the country from which over 10,000 fatalities were registered in 2020, advocates for a law of migrating herders to a separate place and stay away from farmers.
She noted that herders in Nigeria graze their cattle on the crops of farmers when the green space is exploited as a result of climate change like drying out of Lake Chad.
“I am suggesting a policy that I think will bring back sanity in Nigeria especially among herders and farmers,” she said.
This is the second time that this workshop is being held on the African continent, the first one was held in Ghana. The rest of other conferences have been held at Oxford University in the United Kingdom.
Makerere University to set up an agro-processing skilling hub in 2024
Makerere University in partnership with Promote Uganda Company Limited (PROUL) is set to establish an agro-processing skilling hub next year to expose students to agricultural machinery.
The hub that will be based at Makerere University main campus in Kampala will house agricultural machines that add value to agricultural products.
While unveiling the initiative on Thursday, November 23 during the opening day of the three-day 2nd Innovation and Agro-processing machine exhibition at Makerere University’s Freedom Square, Mr David Nsubuga, the Director for PROUL said many youths remain unemployed despite their academic qualifications and it is high time they embraced new technology to create more job opportunities for the graduates. He revealed that the university will be signing a memorandum of understanding with PROUL next week.
“On top of the courses students are studying, we are going to establish a skilling center where they can be exposed to the machines that add value to agricultural products. We believe that when they start buying and selling finished agricultural products, this, will start them on the journey of industrialists.” he noted
The Vice Chancellor, represented by his deputy Prof. Umar Kakumba, revealed that the university has student innovators who just need backup funds to transform the agricultural sector.
“They have innovated machinery that can do irrigation. We are partnering with Promote Uganda Limited to showcase some of the innovations and to be able to connect them to banks which can give them credit and be able to promote their machinery that they are producing including those that do a lot with production of finished goods.” He said in a message delivered by Prof Umar Kakumba, the Deputy Vice Chancellor in charge of academics.
Student innovators of agricultural machinery are those pursuing degree programmes related to bioprocessing engineering, water resources engineering, dealing with mechanical engineering and students of business management sciences among others.
The 2nd innovation and Agro-processing machine expo is a three day exhibition that will run from Thursday, November 23 to Saturday, November 25.
Prof Kakumba understands 80 percent of Makerere graduates fail to get formal employment and revealed the need to inject money in such innovations to harness surging number of unemployed youth flooding the streets of Kampala looking for what to do saying, “Every year, higher institutions of learning and tertiary institutions produce about 150,000 students and yet government job slots are around 30,000 only which is a great blow to students who want white collar jobs,” he added
Mr Steven Byantwale Tibeijuka, the Director Crop Protection in the Ministry of Agriculture, Animal Fisheries and Industries who represented the minister for Agriculture, Mr Frank Tumwebaze pledged on behalf of the government to support the skilling hub that will be established at Makerere University next year.
“I ask the University to put it into writing and address the letter to the minister, the government cannot fail to give you funds once everything is ready,” he pledged
Dr Cathy Mbidde, the manager of the Makerere University Innovation hub said the hub was established in August 2022 under the office of the Vice Chancellor to commercialise the innovations from basically research that the university does and their main goal is to create awareness of the agro-processing machinery.
She added: “When you look at the current Uganda National Development Plan III government’s agenda goal one is agri-industrialisation. As the University, yes we do research and teach but how do we work with the private sector to achieve that goal. We have students who have done research and discovered nutritional values but they don’t have the machinery and access.”
She believes this expo will act as an eye opener to young innovators to team up and purchase the agricultural machinery they need to start up small companies and food processing enterprises while still at the university.
According to her, every year Makerere University graduates around 13,000 students and they can’t find jobs anywhere so there is a need to come up with financing models through financing companies, Non-governmental organisations, and the government to help them to get machinery on credit.
Promote Uganda limited is a company that produces agricultural machinery and their partnership with the university is to introduce the idea of using machines to add value to agricultural products.
When many students graduate, they fail to get formal employment, and end up going to Arab countries where many have lost their lives.
Mr Nsubuga wants the skilling training on operation of agricultural machinery to be added to the students’ courses.
The skilling center will help students to become entrepreneurs and know how to utilise raw materials that are readily available from agriculture to make value added products. The expo is a cross-cutting student exhibition.
Mr Anthony Akandwanaho, a student from Busitema University, said had come to exhibit a day and night dryer invented by his lecturer.
“The machine uses solar thermal during the day to dry the products which it collects directly from the sun and transpires the heat to the products for drying and solar energy during the night,” he said
He noted that this machine dries products from both animal and plant types including meat, chicken, fruits and vegetables. And the maximum drying time for products is 24 hours, for those with higher moisture content like pineapples. However, for products like meat, it dries them within eight hours.
“The unique beauty with it is that you collect the water from the product and can be used for domestic purposes.” Mr Akandwanaho explained
The student also exhibited a chicken de-feathering machine which is able to rip all feathers from the chicken. The mode of operation is that you slaughter the chicken and soak it in warm water for about one minute and transfer the chicken to the machines and in 15 seconds, the feathers are all removed. Its production rate is three chicken per minute.
Some of the exhibited machinery include a garden sprayer, a maize mill, grain grinder stainless, potato slicer, electric chips cutter, vacuum sealer, food dryer, bone Shaw, meat cutter among others.
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