1) The document discusses a collaborative research project between the Uganda Revenue Authority (URA) and external researchers to analyze high-net-worth individuals (HNWIs) in Uganda and improve tax compliance among this group. 2) It finds there are many potential HNWIs in various economic sectors in Uganda who have high incomes but pay little in personal income taxes. These include individuals in finance, real estate, professional services, and public sector roles. 3) While Uganda has legal and administrative structures like anti-avoidance rules and a penalty regime to tax HNWIs, there are still weaknesses like low tax collection overall, a large informal sector, and political influences that enable non-compliance among elite taxpayers.

2. ü Collaborative research (URA , External researcher&
ICTD)
ü Supported by ICTD /IDS and Milly I. Nalukwago
ü Phase I&II
ü Team: Ronald Waiswa (URA), Patrick Lumala
( U R A ) , S u s a n N a k a t o ( U R A ) & J a l i a
Kangave(External)
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3. ü Low tax collections (Uganda has 12.92% tax to GDP ratio compared to 30
-40 % in developed economies).
ü Poor countries collect very little from the rich.
ü Capital rich countries (2009) - UK (top 0.5%: 17% ); Germany (top 0.1%:
8%); USA (top 1%: 40% );
ü Personal income taxes remain largely un tapped in Uganda (Less than 1% in
Domestic taxes annually) .
ü Income taxes mostly target corporate entities.
ü They have the potential to contribute significantly to total tax revenue.
ü These individuals often engage in complex commercial transactions,
ü The compliance behavior of this group of taxpayers is bound to have a
bearing on the integrity of the tax system as a whole.
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4. i. Defining, categorizing and identifying potential HNWIs in
Uganda;
ii. Analyzing the legal and URA administrative strengths and
weaknesses in taxing this segment of taxpayers;
The second phase will aim at:
iii. Establishing a threshold that distinguishes these individuals
from other taxpayers;
iv. Developing a comprehensive compliance behavior
monitoring plan for this group of taxpayers.
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5. 1. Interviews.
ü URA officials; Kampala Capital City
Authority; Ministry of finance, Bank of
Uganda, Audit Firms, commercial bank,
academician in the law school of Makerere
University
2. Data matching and analysis,
External data & Internal URA data for FY
2011/2012 – 2014/2015;
ü Taxpayer registration details as at January
2015;
ü Tax payments data for 2011/2012 –
2013/2014;
ü Stamp duty payments on land transfers
2012;
ü Audit data 2011/2012 – 2013/2014.
ü KCCA Property register
3. Textual analysis,
ü Domestic laws;
ü Parliament hansards;
ü Academic articles;
ü URA reports;
ü Budget speeches;
ü Newspaper articles;
ü Lifestyle magazines
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6. Wednesday, February 10, 16 6
1) There are potential HNWIs in Uganda.
These are in all sectors of the economy both private and
public. Have multiple directorships (16 directorship in more
than 5 top tax paying companies).
• Majority are in whole sale and retail sector but those
with the highest potential are in;
• Financial and insurance services,
• Real estate sector,(88.52 % individuals purchased land of
above 500Mn but paid no income taxes in 3 financial years.)
• Professional and technical services (3 of the 11 billionaires
in the CEO magazine were professionals, 2 lawyers & 1 doctor).
• Manufacturing,
• Construction,
• Public sectors (Accountants, procurement officials)

7. Sectors No. of
taxpayers
Total income
tax (Bns)
Average
Revenue
(Bn)
K-Financial and insurance activities 3 2.17 0.72
L-Real estate activities 4 1.68 0.42
M-Professional, scientific activities 7 2.71 0.39
C-Manufacturing 2 0.67 0.33
F-Construction 1 0.30 0.30
N-Administrative and support service 2 0.46 0.23
J-Information and communication 1 0.15 0.15
S-Other service activities 4 0.21 0.05
G-Wholesale and retail trade; 50 0.92 0.02
H-Transportation and storage 2 0.03 0.02
I-Accommodation activities 2 0.02 0.01 7

8. 8
2.) The huge informal sector (49% of the economy)
The missing aspect in the definition of informal sector
To what extent are large commercial enterprises informal?
There is a large informal sector within the formal sector.
3) The politics ( pure economic elites, civil servants, politicians)
ü Politicians and civil servants as business people: schools, hotels,
media houses and land ;
Out of 71 officials studied, only one remitted income tax. Companies
they are associated with also largely non-compliant;
4) Little aggressive tax planning but massive tax evasion

9. Strong Legal Framework
Taxation of Individuals:
§ Propertied individuals – rental
tax;
§ Professionals – taxation of
directors and partners;
§ O f f s h o r e i n v e s t m e n t s :
residence based taxation;
§ Additional 10% tax for income
in excess of UGX 120m
annually
Legal framework…
§ A n t i - a v o i d a n c e r u l e s
( t r a n s a c t i o n s b e t w e e n
associates)
§ Penalty regime: non-filing,
underpayment of taxes, false
or misleading statements and
failure to keep proper records;
§ Politically exposed persons:
Anti-Money Laundering Act -
suspicious transactions and
illicit financial flows

10. Administra6ve Strengths
• HNWI segment operationalized
in September 2015 (5 staff);
• 52 HNWIs: 11.22Bn
• LTO: top 50 individuals based
on tax contribution and all
individuals paying more than
UGX 4 billion per year;
• VIP Taxpayer Segment (1 July
2015): powerful government
officials and individuals with
potential to influence large
masses
Administra6ve Strengths…
• Rental Project (July 2014): As
at 2 January 2015, it had
added 9,606 properties to the
property register BUT still only
14.1% of KCCA register.
• Ta x p a y e r R e g i s t r a t i o n
Expansion Project: By June
2015, TREP had added 47,647
taxpayers to the URA Taxpayer
Register;
• E-Tax System (2009): almost
all the tax is collected through
e-tax;

11. Taxation of Individuals:
§ Individuals account for 92.5% of taxpayer register;
§ 68% employees; 15% business income; 1% rental income and 16%
other income;
§ Registration doesn’t necessarily translate into tax payment. In FY
2013/2014, with the exception of employees, only 13% of the
remaining individuals on tax register paid taxes;
§ Mismatch between customs duties(8%) and income taxes(<1%). FY
2013/2014: four individuals paid over UGX 1 billion in customs
duties but only two paid income taxes. Twelve individuals paid over
UGX 500m in customs duties but none remitted income taxes;

12. § Enforcement of requirement of directors to file returns (2013).
FY 2013/2014 – only 5% directors remitted taxes, some as
low as USD $5.38 despite directorship in top taxpaying
companies;
§ Sample of top 60 lawyers in the country (International
Financial Law Review). For each of the three financial years
studied, less than a third of the lawyers were remitting taxes;
§ Allowances as part of employment income are misused for the
public sector;(funded projects allowances, meetings etc)

13. § Relaxation of rules relating to TINs to allow faster system
implementation e.g. e-tax requirement for businesses to include
TINs of all their employees before using system; However, URA has
started with all government workers having TINs
§ Tax clearance certificates for transfers of funds in excess of 2500
currency points outside Uganda;
§ Difficulty in implementing provisions relating to taxation of trusts
(largely informal sector).

14. Mechanisms
§ E-tax, ASYCUDA and Sun
Systems;
§ Joint Compliance Committee;
§ MOUs with other government
agencies and some revenue
authorities;
§ Sharing of information under
DTAs.
Hiccups
§ Silo mentality within URA;
§ Limitations on use of systems
within URA departments;
§ Third party information: utilization
of information from commercial
banks;
§ Different levels of automation –
other government agencies;
§ Lack of central management
system for MOUs;
§ Accuracy and comprehensiveness
of data;
§ Ability and capacity to analyse
data
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15. Targeted at taxpayers
§ Encouraging quasi-voluntary
compliance; tax bargains
§ Dealing with non compliance.
Tax education & amnesties;
§ Deal with deliberate non
compliance; consumption
taxes, taxing corruption.
URA & Government
§ Prioritize individual taxpayers
§ Building tax morale; (account
for the tax, equality in taxation,
fight corruption)
§ Tackling the problem of the
informal sector; Strengthen
T R E P, m i n i m i s e c a s h
transactions
§ Strengthening the capacity of
URA officials (Audit & Analysis)
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16. Thank you!!!!!!
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