The International Monetary Fund (IMF) has urged the government of Uganda to implement tax reforms to tackle its recent revenue shortfall.
There is a need to pay increased attention to revenue mobilization, Ana Luc?a Coronel, leader of a recent IMF mission to Uganda, said. She was speaking at the conclusion of a review of Uganda’s IMF-backed economic program.
“Following the recent large shortfall in tax revenue and the risk of reductions in foreign aid, broadening the tax base and improving efficiency in tax administration are more critical than ever,” Coronel said.
She continued: “The mission strongly encourages the government to take decisive action to increase tax revenue collections. This would involve reviewing existing tax laws and eliminating tax exemptions that have little benefit for production but undermine growth-enhancing spending and constrain vibrant private sector growth.
“Efforts should also center on strongly enforcing compliance by all taxpayers. The ongoing issuance of national identity cards should support the government’s efforts to achieve the long-awaited plan to raise Ugandan tax revenue and bring it closer to regional standards.”
In 2012 Uganda’s tax revenue accounted for around 12 percent of gross domestic product, according to the IMF’s 2013 Article IV consultation report for the country. This was lower than the ratios in the other four countries comprising the East African Community, which ranged from around 13 percent to nearly 20 percent.
Source taxnews.com
