KIKUUBE, November 28, 2023 – Kikuube district leaders are concerned that several companies in the district are not paying their fair share of taxes, which they say is affecting service delivery in the district.
Teddy Kyomugisha the female council for Kiziranfumbi Sub-county and chairperson Finance Committee said only a few of the several businesses operating in the district are pay taxes.
She noted that few companies such as Hoima Sugar, and tea growers have paid for their operating licences.
She said that the district has a wider revenue base but is not being utilised. She said there is need to put in place measures that can make more businesses pay their taxes.
Chris Nkalu, the Bugambe Sub-county male district councilor and district speaker said there is need to sensitise the public about the importance of paying taxes.
He noted that the district is struggling to deliver services to the people due to the recent budget cuts, adding that the situation is going to worsen as the local revenue collection continues to decline.
He noted that in the last financial year the district they targeted to collect Shs 1.5 billion but only Shs 800 million was collected, attributing it to the nonpayment of taxes by some people, companies and other business.
“Financials 2022-2023 the district budgeted to collect Shs 1.5bln local revenue but we only collected Shs 800mln and this is because most of the companies operating in the district are not paying taxes to the district,” he said.
Peter Banura, the Kikuube district chairman, explained that the district is compiling a list of companies and businesses that are supposed to pay taxes, a move expected to widen the tax base.
However, the district council last week passed a resolution to help the Chief Administrative Officer to enforce tax collection so that the district can be able to improve service delivery such as working on feeder roads, schools, health centres, and others.
The district expects to spend Shs 29.5bln in the next financial year 2024/2025, with most of the funds expected to come from the central government.
Most Ugandans are not paying taxes
Following the recent reading of the financial year 2023/24 budget speech, a lot has been said about Uganda’s low tax to GDP ratio which currently stands at 13.9 percent. The tax to GDP ratio is a measure of a nation’s tax revenue relative to the size of its economy as measured by gross domestic product [GDP]. It indicates the extent to which a country’s economic output contributes to its tax revenue. A low tax to GDP ratio indicates that a significant part of the country’s economic activity is untaxed and that there are fewer actors contributing to the country’s tax revenue.
It is generally agreed that raising tax as a share of GDP is an important part of the development process and a key component of building an effective state. One of the challenges in achieving this is the high level of non-compliance in the tax system.
In 2021, the Uganda Revenue Authority statistics revealed that only one million people in Uganda were paying taxes despite the large population engaged in economic activities.
https://thecooperator.news/kikuube-holds-budget-conference-with-call-to-focus-on-service-delivery/
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