URA CORPORATE PLAN 2016/17 - 2019/20
CORPORATE PLAN 2016/17 - 2019/20
Cultivating a taxpaying culture
Cultivating a taxpaying culture
16.98% 19.38Tn 18/19
16.98% 19.38Tn 18/19
15.97% 16.41Tn
17/18
14.95% 13.86Tn 16/17
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker i URA CORPORATE PLAN 2016/17 - 2019/20
ii “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
CORPORATE PLAN 2016/17 - 2019/20
Cultivating a taxpaying culture
URA @ 2020
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker iii URA CORPORATE PLAN 2016/17 - 2019/20
iv “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20 TABLE OF CONTENTS
Foreword from Chairperson URA Board...... viii Preface from URA Commissioner General...... ix EXECUTIVE SUMMARY...... xiii 1.0 INTRODUCTION...... 1 1.1 Background...... 1 1.2 URA Business Model...... 1 1.3 Role of URA in Uganda’s Development Agenda...... 2 1.4 Implementation of the Corporate Plan 2011/12 - 2015/16...... 5 1.5 Preparation of the corporate plan 2016/17 – 2019/20...... 13 2.0 ORGANISATIONAL HEALTH ASSESSMENT...... 15 2.1 SWOT Analysis Results...... 15 2.2 PESTEL (Operating Environment)...... 18 3.0 URA’S STRATEGY...... 22 3.1 Overarching Strategy...... 25 3.2 Strategic Themes and Results...... 25 3.3 Strategy Mapping...... 25 3.4 Objectives and initiatives...... 26 3.5 Corporate Scorecard 2016/17 – 2019/20...... 30 4 ENTERPRISE RISK MANAGEMENT...... 33 5 STRATEGY MONITORING AND EVALUATION (M&E)...... 36 6 REVENUE PROJECTIONS...... 40 6.1 Revenue Projections for 2016/17-2019/20...... 40 6.2 Projected Sector Tax to GDP Ratios...... 43 6.3 Underlying Assumptions for Projections...... 44 7 FINANCIAL RESOURCE REQUIREMENT...... 46 Note: the finding gap is vividly increasing over the four (4) years...... 46 8 CHANGE MANAGEMENT...... 48 9 CONCLUSION...... 50 10 ANNEXES...... 52
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker v URA CORPORATE PLAN 2016/17 - 2019/20 GLOSSARY
AEO Authorized Economic Operator AGOA African Growth Opportunities Act ASYCUDA Automated System for Customs Data CATA Commonwealth Association of Tax Administrators CG Commissioner General COMESA Common Market for East and Southern Africa CS Customs Services CSD Corporate Services Department CSR Corporate Social Responsibility DFID Department For International Development DT Domestic Taxes EAC East African Community EARATC East African Revenue Authorities Technical Committee ECTS Electronic Cargo Tracking System EPAs Economic Partnership Negotiations GDP Gross Domestic Product HR Human Resources ICT Information Communication Technology IGAD Inter Africa Governmental Authority on Development IMF International Monetary Fund IT Information Technology MCP Managing Compliance Programme MDGs Millennium Development Goals M&E Monitoring and Evaluation MOD Modernization MoFPED Ministry of Finance, Planning & Economic Development MTEF Medium Term Expenditure Framework NDP National Development Plan OECD Organization for Economic Cooperation and Development PAYE Pay As You Earn PESTLE Political, Economic, Social, Technological, Legal, Environmental PM Performance Management PPP Public Private Partnerships RPD Research, Planning and Development
vi “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
SD Sustainable Development SWOT Strengths Weaknesses, Opportunities, Threats TADAT Tax Administration Assessment Tool TIN Taxpayer Identification Number UMI Upper Middle Income URA Uganda Revenue Authority URAnet Uganda Revenue Authority Network VAT Value Added Tax VFM Value for Money WTO World Trade Organization
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker vii URA CORPORATE PLAN 2016/17 - 2019/20
FOREWORD FROM CHAIRPERSON URA BOARD
Uganda Revenue Authority has undergone through substantial positive transformation since 2005. Tax revenue has tremendously grown over the 11 years mainly driven by a growing economy, improvements in administrative efficiencies and gains harvested from the investment in improved systems, processes and technology as part of URA modernization programme II. The key challenge for URA is to retain and consolidate its proactive approach, while highlighting new initiatives and projects that provide a multiplier effect on URA service offerings. The 2016-19 Corporate Plan will drive URA towards addressing strategic The launch a new Corporate Plan establishes challenges successfully while ensuring that a milestone for an organization, especially an URA continues to serve as a model of best institution critical to Uganda like URA. The practice and innovation in Revenue Services. URA Board bears an overarching responsibility Launching the 3rd corporate plan in the 11 year of operational performance and strategic span is a highly commendable achievement management of the organization. and demonstrates the utmost professionalism The Corporate plan 2016/17 – 2019/20 of the Management Team and entire staff of comes at an important stage in Uganda’s URA in their dedicated endeavor to move the development agenda with great responsibility organization forward and upward. on URA to increase her contribution towards As URA Board Chairperson, I would like to financing Uganda’s Vision 2040 objectives and reiterate the confidence and appreciation the National Development Plan II. I am fully the Board has in the entire staff body in confident that the strategic direction, reform contributing to the development of Uganda priorities and actions within this Strategic Plan as we implement the strategies and priorities will propel URA and Uganda into achieving detailed within this Corporate Plan. I further these Goals. reassure you the Board’s full commitment The 2016/17 – 2019/20 Corporate Plan and support as we embark on the crucial articulates the URA’s Strategic Vision and implementation phases of this corporate plan direction and its launch presents a new that is envisaged to shape the URA’s future era in Tax Revenue Administration in terms against all odds. of promoting a culture of tax compliance while at the same time enhancing corporate governance in URA. We have to find ways of Dr. Simon Kagugube broadening the tax base, both by identifying new sources of revenue and by being more assertive in ensuring that those who are liable to pay tax meet their tax obligations fully and timely.
viii “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
PREFACE FROM URA COMMISSIONER GENERAL
the quality of our people, improving process efficiency and building productive partnerships. These will enable us provide excellent services to taxpayers and strengthen our compliance efforts. We will also continue to apply risk management principles to focus our efforts on areas where we will have the biggest effect on compliance. I have confidence in the professionalism and determination of URA staff and Management team to drive this plan to its fruitful outcome. I commend this plan to you and commit to its In the Corporate Planning period 2011/12 to successful execution. 2015/16, URA implemented her corporate plan in a bid to attain Corporate Excellence. The overarching Goal over this period was to Maximize Compliance while leveraging Technology and Professionalism in Revenue Service. Doris Akol Revenue performance improved from UGX. 6,208.25Bn In the FY 2011/12 to UGX 9,715.60Bn in the FY 2014/15, representing a percentage growth in revenue of 56.5%. In the FY 2014/15 URA posted the highest surplus in the history of the Agency having collected an extra UGX 139.2Bn over the target. This was possible because of commitment from staff, the taxpaying community and continued support from Government and Development Partners. In addition, improvement in business processes, arrears recovery and collaboration with Strategic Partners like local authorities also contributed to increased tax collections.
However, many critical initiatives that had to be implemented during this period were not actualized due to in-adequate financing levels. Over the next four years, we will continue to change the way we operate in order to meet the growing expectations of taxpayers. Building a taxpaying culture is the Strategic direction that we shall be pursuing and the cornerstones to this journey will be improving
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker ix URA CORPORATE PLAN 2016/17 - 2019/20 URA Board of Directors
Dr. Simon Kagugube Ms. Loy Tumusiime Mr. Keith Muhakanizi
Ambassador Julius Onen Mr. Nicholas John Okwir Ms. Doris Akol
URA Management Executive Committee
x “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20 URA Management Structure
The URA structure is divided into 7 levels (ranks); Commissioner General, Commissioners, Assistant Commissioners, Managers, Supervisors, Officers and support staff. The figure below shows the management levels.
From Senior management as depicted in the ornogram above, we have four levels below; Managers, Supervisors, Officers and Support staff
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker xi URA CORPORATE PLAN 2016/17 - 2019/20
STRATEGIC “Cultivate a taxpaying culture through provision of reliable services, DIRECTION leadership development and building strategic partnerships”
xii “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20 EXECUTIVE SUMMARY
The Corporate Plan 2016-2019 is premised on the need to cultivate a tax paying culture through provision of reliable services, leadership development and building strategic partnerships. An organization assessment was conducted to identify internal and external challenges facing URA. Engagements with key strategic partners were also held to identify issues that URA needs to address to achieve its aspirations. As a result of the assessment and engagements, Enablers (strengths and opportunities) and Pains (weaknesses and threats) were identified. These Pains and Enablers have informed our strategies that we are pursuing in the medium term. We shall also consolidate the gains realized from the Corporate Plan ended June 2016. In this corporate plan we shall continue focusing on three pillars of excellence which we believe will collectively create value and contribute to the realization of the Mission and Vision. These are; Process efficiency, Productive partnership and Quality People. In order for URA to realize her performance expectation of maximizing revenue over the next four years, we shall pursue the following objectives: • Improve our People - which seeks to optimize talent management, improve staff integrity, motivation and productivity. • Transform our Process – which seeks to improve process management, IT reliability, simplify processes, achieve process integration and improve and ultimately improve Process Maturity. • Optimize Stakeholder Relations- which seeks to increase stakeholder participation in process development and revenue mobilization. • Improve Quality of Service – which seeks to improve service transparency, ambience, accessibility, responsiveness, availability and predictability. • Improve Compliance – which seeks to build a tax paying culture.
This journey is therefore envisaged to transform URA into a model of best practice and innovation in revenue services.
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker xiii URA CORPORATE PLAN 2016/17 - 2019/20
xiv “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20 1.0 INTRODUCTION
1.1 Background
Uganda Revenue Authority (URA) is a semi- autonomous Agency established in September 1991 by an Act of Parliament. URA is charged with the primary responsibility of assessing, collecting and accounting for Government tax and non-tax revenues to finance and sustain the national recurrent and development expenditure. URA also advises government on Tax policy issues. Administration of Uganda’s Tax system is governed by the following laws, The constitution of the Republic of Uganda 1995, as amended in 2005; The Public Finance Management Act Cap 149 as amended in 2015; The Contingencies Fund Act Cap 150; The local Government Act , cap 243, The Income tax Act, cap 340 as amended, The Value Added Tax Act, cap 349 as amended ; The East African Excise management Act 1970, cap 28, as amended , The Stamps Act , cap 342;The Traffic and Road Safety Act , 1998, cap 361; The Gaming and Pool Betting (Control and Taxation) Act, Cap 292; and The East African Community Customs Management Act, 2004. URA adopted the Balanced Score Card framework as the Strategic Management methodology to ensure that URA develops an appropriate organization strategy, translates strategy into operational terms, aligns employee effort towards a shared vision, communicates Strategy to all stakeholders and ultimately measure and report individual and corporate performance. This is supported by the Business Model Canvas to serve URA’s willing, unwilling and potential clients.
1.2 URA Business Model URA’s Business model defines how URA is internally structured and organized to provide a value proposition (an offering) to her clients with the higher-call of generating revenues. It describes how URA business is structured and its avenues for maximizing revenue mobilization, how the components of the business as a system fits together to collect revenue and creates a shared understanding to guide and inform strategic discussions. On the whole, the URA business model defines how URA creates, delivers and captures value. The Balanced scorecard operationalizes the elements in the Business Model (BM) by laying out what shall be done, when & how.
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 1 URA CORPORATE PLAN 2016/17 - 2019/20
Figure 1: URA Business Model Canvas (BMC)
This corporate plan is developed in line with Uganda’s development priorities as outlined in Uganda Vision 2040 and National Development Plan II. To this end, URA is focusing on improving domestic revenue mobilization in this period by building a tax compliance culture.
1.3 Role of URA in Uganda’s Development Agenda
The primary role of URA in Uganda’s Development Agenda (Millennium Development Goals (MDGs) and Sustainable Development Goals (SD)) is the mobilization of adequate financial resources (Revenue) to finance Government Programmes. Uganda Revenue Authority draws this responsibility from her mandate of Assessing, collecting and accounting for all Government Tax and Non-tax revenue and advising Government on Tax Policy issues. External financing is highly unpredictable and sometimes has strings attached, therefore URA has to continuously provide excellent services and excel at her Business to be able to finance a greater proportion of the Central Government Budget and ultimately reduce Donor dependency and borrowing. Vision 2040 The Goal of Uganda Vision 2040 is “A transformed Ugandan society from a peasant to a modern and prosperous country within 30 years” This involves changing from a predominantly low income to a competitive upper middle income country within 30 years. It is envisaged that the country will graduate to the middle income segment by 2017 and reach a per capita of USD 9,500 by 2040. The theme of the Vision is, “Accelerating Uganda’s Socio-economic Transformation”. To realize this Vision, Uganda will need to increase its GDP 30 folds in the next 30 years to attain the level of development observed in Upper Middle Income (UMI) countries. An analysis of these countries’ development paths and assessment of Uganda’s potential confirms that it is possible for the country to attain an upper middle income status within the next 30 years.
2 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
The Vision 2040 is conceptualized around harnessing the opportunities, improving competitiveness and strengthening the fundamentals for transformation. The opportunities include; oil and gas, tourism, minerals, ICT business, abundant labour force, geographical location, water resources, off-shoring of industries and services, and agro-based industries. On the other hand, the fundamentals include: physical infrastructure; ICT infrastructure; Science, Technology, Innovation and Engineering (STIE); and human resource. To achieve Vision 2040 targets, Government will require substantial amount of funds to finance the investments envisaged over the Vision period. The main source of funding will be Tax and Non - Tax Revenues, meaning that Uganda Revenue Authority needs a robust Strategy to be able to improve tax administration processes and systems further. Other sources of financing are Public Private Partnerships (PPPs), concessional loans and grants, revenue from oil and gas and borrowing from domestic and international markets. National Development Plan II (NDP II) The NDPII aims at strengthening Uganda’s Competitiveness for Sustainable Wealth Creation, Employment and Inclusive Growth. URA’s corporate plan must therefore be aligned to finance NDP II’s objectives given the overall budget deficit level that has been unstable due to the changing architecture of Official Development Assistance and withholding of external assistance by some development partners. This calls for increased efforts in domestic resource mobilisation like rigorous registration and categorisation of the informal and formal sectors for easy traceability for revenue purposes, review of exceptional tax hurdles and broader tax exemptions. Additionally, the NDPII emphasizes the need to explore more innovative sources of financing development such as locally dominated bonds and infrastructure bonds to ensure that the public debts fits within sustainable fiscal and monetary framework . NDP II highlights interventions to increase the tax to GDP ratio as follows; i. Develop and implement a policy on mandatory association membership for informal sector players ii. Rationalize the rental tax regime and integrate e-tax with utilities and other agencies iii. Streamline the non-standard VAT tax exemptions iv. Develop mechanisms for exploiting capital gains tax v. Strengthen Inter-Agency collaboration among agencies concerned with investment promotion i.e. UIA, KCCA, LGs, URA & URBS to design and implement a mutually beneficial comprehensive investment regime vi. Combat international tax evasion schemes in complex sectors to raise more tax e.g. corporate tax vii. Strengthen capacity of relevant staff in critical functions of revenue management, audit, forensics investigations and Legal Affairs.
In order to increase the tax to GDP ratio, the government has to mobilize UGX 113.7 trillion in the period 2015/16 to 2019/20, which translates into at least UGX. 22.74 Trillion per Financial year. As of FY2015/16, Uganda Revenue Authority’s target was 11.7 trillion meaning that an addition of 11.4 is needed to fully finance the NDPII budget in its first year. Below is figure of projected Revenue contribution to Government Spending.
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 3 URA CORPORATE PLAN 2016/17 - 2019/20
Figure 2: Projected Revenue Contribution to Government Spending in NDP II
Source: URA Database and MoFPED Macro-economic Statistics, 2015
For tax-revenues to make tangible contributions requires a paradigm shift in the tax administration and a responsive approach to revenue mobilization in the short and long-term. As the government also pursues the desired ambition of increasing the tax-to-GDP ratio, several propositions have been made which are also incorporated in the strategies of this corporate plan. Uganda’s Global and Regional commitments Uganda is a party to the General Agreement on Tariffs and Trade (GATT) and also ratified the Marrakesh Agreement in September 1994 to become a founding member of the World Trade Organization (WTO). Regionally, Uganda is a member of the East Africa Community (EAC), Common Market for East and Southern Africa (COMESA), Inter-Governmental Authority on Development (IGAD) regional schemes. Uganda is also among African, Caribbean and Pacific (ACP) currently negotiating the Economic Partnership Negotiations (EPAs). The EU-EAC-EPAs imply that all imports from EAC countries enter the EU duty and on a quota free system while EAC liberalizes 82.6% of imports from the EU by value1. EAC products that attracted tariffs into the EC under the Cotonou Partnership Agreement are now zero‐rated The country is therefore bound by the treaties, agreements and articles of their protocols. This kind of membership promotes harmonization of domestic policies at regional level to ensure free trade in goods and services. Given these commitments in global and regional fora that promotes multilateralism and free trade, means that international taxes will be reducing and therefore Uganda should concentrate more on domestically generated revenues. There is an opportunity for Uganda to benefit from initiatives such as the African Growth Opportunity Act (AGOA), EPAs and Everything But Arms (EBA) by the United States and European Union respectively to develop her domestic industries to be able to increase the domestic revenue base.
1 Fact sheet on the Economic Partnership Agreements, September 2014
4 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
Uganda being a member of the Organization of Economic Co-operation and Development (OECD) Global Forum on Transparency and Exchange of Information for Tax Purposes, Uganda can utilize these platforms to share information and to increase investments in the country which will support domestic revenue mobilization. However being in such agreements exposes us to tax treaty shopping (avoidance and evasion). Uganda Revenue Authority therefore has to strengthen the audit arm and international taxation segments to comprehensively assess taxes for multinationals.
1.4 Implementation of the Corporate Plan 2011/12 - 2015/16 Achievements The Corporate Plan 2011 – 2015 set out to address several Pains, achieve different milestones and exploit opportunities that were identified in the Organizational Assessment exercise carried out. In this Section we shall look at the key planned outputs (Outcomes) of Tax to GDP ratio, Revenue performance, Compliance and Taxpayer register growth. Performance in other areas is highlighted in the Corporate Scorecard. Revenue performance
During the corporate plan period, revenue collections have surpassed the target in 2 financial years; 2011/2012 and 2014/2015.
Figure 3: Revenue Performance over the period 2011-2014
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 5 URA CORPORATE PLAN 2016/17 - 2019/20
Table 1: Revenue Performance by tax category in the last 4 years 2011/12 2012/13 2013/14 2014/15
URA Net Actual 6,208.35 7,149.48 8,031.03 9,715.60
URA Net Target 6,169.28 7,250.50 8,534.51 9,576.59
URA Net Performance 100.63% 98.61% 94.10% 101.45%
Domestic Actual 3,472.04 4,274.73 4,671.21 5,553.97
Domestic Target 3,391.65 4,038.29 5,135.43 5,529.29
Domestic Performance 102.37% 105.85% 90.96% 100.45%
International Actual 2,937.18 3,070.51 3,548.00 4,338.23
International Target 3,046.08 3,392.92 3,589.68 4,263.00
International Performance 96.42% 90.50% 98.84% 101.76%
NTR Actual 65.45 89.52 110.47 224.09
NTR Target 68 86.125 204.4227 182.33
NTR Performance 96.25% 103.94% 54.04% 122.90%
URA Net Revenue Growth 21.39% 15.16% 12.33% 20.98% Source: Revenue statistics tables
Tax to GDP ratio
As indicated in table 2 below, the net Tax to GDP ratio as at the end of FY 2014/15 was 12.83% up from 11.74% in the FY 2013/2014. This is far below the targeted 16% as at the end of Corporate Plan period this Financial Year (2015/16). The highest tax to GDP ratio recorded in the last four years was in FY 2014/15 at 12.83%. This tax to GDP ratio is far below the Sub Saharan average of 18%. This requires URA to enforce and monitor Policy Measures passed in the FY 2015/16 budget to penetrate into the informal sector which would increase the tax to GDP ratio
Table 2: Tax to GDP ratios for past 4 years.
GDP (at current market price) 59,420 63,905 68,407 75,738 Net URA collections 6,208.4 7,149.5 8,031.0 9,715.6 Gross Revenues 6,550.8 7,489.4 8,377.83 10,116.3 Tax to GDP ratios Net URA collections (%) 12.45 11.19 11.74 12.83 Gross Revenues (%) 13.14 11.72 12.25 13.36 GDP Growth (at current market prices) (%) 26.22 7.55 7.04 10.72 Source: Background to the budget FY 2015/16 and URA database
Filing ratio There was higher compliance in VAT filing at an average of 86% over the 4 years more than and PAYE at 80%. The average filing ratios for VAT and PAYE was 84% which is below the projected target of 88% by the year 2014/15.
6 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
Table 3: Growth in the tax payer register FY 2011/12 FY 2012/13 FY 2013/14 FY 2014/15 Filing Ratios VAT PAYE VAT PAYE VAT PAYE VAT PAYE Large Taxpayers Office 87 85 98 95 98 95 98 95 Medium Taxpayers Office 84 79 95 86 93 85 90 84 Small Taxpayers Office 59 59 78 63 75 64 73 64 Average Filing Ratio 77 74 91 82 89 81 87 81
Taxpayer Register The tax register grew by 581.6% from 109,309 in 2011/12 to 745,097 in 2014/15 as highlighted in Table 4 and Figure 4 below:
Table 4: Growth in the tax payer register Registration type 2011/12 2012/13 2013/14 2014/15
Individual 91,101 199,235 585,253 697,617
Non Individual 18,208 26,806 47,126 47,480
Total 109,309 226,041 632,379 745,097 Source: e-Tax reports
Figure 4: Growth in the tax payer register
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 7 URA CORPORATE PLAN 2016/17 - 2019/20
The Corporate Scorecard The Corporate Scorecard below highlights performance in the 13 objectives over the corporate planning period.
Table 5: Performance progress of Corporate Objectives
Revenue Increase Revenue Collection to 100.63% 98.14% 94.10% 100% 101.45% Yield target.
Tax Optimize Administration Resource Costs as a 1.91% 2.7% 2.4%% 2.3% 2.3% Utilization percentage of Revenue
FINANCIAL 88% Average Filing 75% 86.06% 85.2% 84.46% Ratio Increase Compliance Percentage reduction in 31.4% 42% +43.5% 30% +33.04% Arrears
Proportion of Enhance met expectations - - - 75% - Relations from Partner interactions
Client satisfaction 75.5% 80% 77% level CLIENT Improve the Quality of Service Proportion of service enhancement 87.5% 100% 100% programmes implemented
8 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
Percentage growth in the tax 9.29% 91.32% 100% 30% 23% payer register Increase The Client Base Proportion of Revenue from - 0.61% 5.75% 5% 0.79% New clients
Effectiveness of Communication - - - 85% 81% Channels Enhance Communication Prop. of communication enhancement 90% 100% 100% programs implemented
Prop. of planned Business process improvement - - 100% 100% 100% Improve Business programs Process Mgt undertaken
BUSINESS PROCESS Business process - - 1 2 1 maturity level
Rating URA as a learning - - - - - organization Improve Knowledge Mgt Prop. of Knowledge Mgt - - 100% 100% 100% programmes implemented
Revenue per Staff 3.24Bn 3.56Bn 3.7 Bn 3.8Bn 4.4 Bn
Improve Prop. of staff Productivity exceeding 5% 35% performance expectation
Staff attrition rate 7.7% 3.3% 1.6% 4% 1.7%
Staff Motivation - - 73.3% 90% 80% Improve Staff level Motivation Prop. of Staff motivation 100% 100% 75% interventions executed
Proportion of staff - 83% 100% 62% trained - Enhance Staff Competence Training budget as a %age of total 0.8% 1.8% 1.5% 2% 1.7% budget LEARNING & INNOVATION Proportion of culture - - 83% 100% 75% programmes Improve URA implemented corporate culture Staff Integrity 90% 71% level
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 9 URA CORPORATE PLAN 2016/17 - 2019/20
Managing Compliance Programme The Managing Compliance Programme (MCP) was a 4 year Programme developed in line with the URA corporate plan 2011/12 – 2015/16. Managing Compliance Programme (MCP) commenced in July 2011 following the closure of Modernization 1 Programme (Mod 1) and closed on 30th June 2015. The Programme was implemented under four (4) projects and accomplished the following:
Project Components Accomplishments
SERVICES SUPPORT ENHANCEMENT PROJECT (SSEP)
• Service delivery diagnostic /assessment completed
• Service management framework, model, concepts and strategy developed
• Service catalogue archetype and guidelines developed
• URA Culture diagnosis completed
• URA culture defined and commissioned; initial orientation done
• User and system requirement developed
• Readiness assessment completed and staff to mirror the providers/ consortium have received initial training.
• Turnkey solution and independent QA procured
• Business Impact Assessment completed, BCM strategy developed and initial orientation done • Business Continuity plan & framework developed
CUSTOMS BUSINESS SUPPORT ENHANCEMENT PROJECT (CBSEP)
• ASYCUDA world system procured, rolled out to 33 Customs stations and staff trained in ASYCUDA world system functionality
• 246 clearing Agents in 155 Firms trained in ASYCUDA world system functionality
• Customs Business processes re-engineered and a Business process manual developed
• Document Processing Centre completed 80% - at final touches of the building before furnishing.
• Customs clearance time in Uganda reduced on average from 4 days to 2.58 days (considering major clearance stations – Busia, Malaba, Kampala, Jinja, Entebbe)
• ASYCUDA world configured to clear fuel and other goods (wheat, bitumen, neutral spirit, etc.) under SCT
• 4 Interconnections /Information exchanges with other government agencies completed (GFI, UNBS, MAAIF, NDA)
10 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
Project Components Accomplishments
• AEO Programme operationalized at 33 Customs stations and 570 customs staff trained
• Operators trained in AEO and 22 authorized
• AEO goods are cleared within 24 hrs. from 4 days. 0% of their transactions that are physically inspected. All go through blue lane.
• ECTS procured, 4 major transit routes geo-mapped and rolled out to 23 Customs transit stations
• Standard operating procedures developed
• 585 staff and 357 operators trained in ECTS functionality
• Time (days) taken from entry to exit reduced on average from 4 to 2 days
• All highly risky transit entries are tracked (7% of transit entries). Target is to truck 20% which includes medium & low risk
• Transit trucks that are physically escorted at selected borders has on average reduced from 10 to 0
INTEGRATED TAX SYSTEMS ENHANCEMENT PROJECT (ITSEP)
• Processes and system requirements for Oil and Gas Solution completed
• Oil & Gas structure developed
• 97 staff trained in Oil & Gas administration
• 6 external stakeholders sensitized on Oil and Gas processes (5 Tax Consulting firms - PWC, KPMG, PKF, Deloitte & Touché, EY and 1 MDA – PEPD)
Interfaces & Integration • HR processes reengineered and system requirements completed
• Information exchange for IFMS, NSSF and MTN completed
• System Integration concept developed INFRASTRUCTURES DEVELOPMENT PROJECT (IDEP)
Completed set up of the One-Stop-Border Posts(OSBPs) as follows: Malaba 100%, Mirama hills 94%, Mutukula 93%, Busia 58%, Katuna 8%, and Elegu - commenced mobilization and site set up
• URA HQ drawings completed
• URA HQ building Construction works commenced and some civil works completed
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MCP Implementation Challenges / Lessons Learnt i. Many critical initiatives/projects that had to be implemented remained un funded and hence scoped out of the Programme implementation plan e.g. establishing a Tax Training and Research Institute ii. To avoid scope creeping, preparation of project plans requires considerable amount of time to enable proper design of implementation methodologies, work plans and identification of cross cutting issues in time. Project planning must be commenced prior to execution of project/ programme related activities to ensure proper scoping, budgeting and governance structures. For example, Integrated Human Resource Management System was scoped of the ITSEP project yet some work had been done. iii. Commissioning of unfunded components of projects has greatly impacted on programme delivery timelines. Funded projects met their deliverables on time. iv. Approving a Project without an approved Project charter could result into implementation team defining their course of action that may not be aligned to the organization direction or managements’ focus. v. The scope of some projects was ambiguous leading to mutation of scope hence affecting delivery of desired outputs within programme timelines. vi. Procedural errors in procurement attract administrative reviews hence leading to delays. vii. Limited resources i.e. specialized skills, financial resources, to manage too many initiatives. With many initiatives, resources have to be duplicated so as to maintain the same standard of excellence viii. Commencing projects without proper investment appraisals or cost benefits analysis being conducted presented budget needs that were not easy to manage within the URA resource envelope. ix. Commencing project implementation without clear budget estimates pose challenges on funding disbursement plan of the organization e.g. a scenario may arise when many initiatives/ project require large sums of money at the same time beyond what the organization can manage. x. Development and implementation of a change management framework is important to provide a unified platform to address corporate wide change needs. This goes a long way in guarantying stakeholder buy, teamwork and minimal resistance to Project deliverables. xi. Clearer and stronger management, coordination and oversight functions will enable future reform initiatives to be mainstreamed within URA’s operations.
12 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
1.5 Preparation of the corporate plan 2016/17 – 2019/20
This Corporate plan has been developed based on both primary and secondary data. Primary data was collected using a consultative process that involved carrying out an environmental scanning exercise through a Political, Economic, Social, Technological, Environmental and Legal (PESTEL) analysis as well as an organizational health assessment exercise to establish the Strengths, Weaknesses, Opportunities and Threats - (SWOT) analysis. Primary data was collected by interviewing URA staff and clients in all URA stations across the country. Views from both private and government strategic partners including KCCA, BOU, MoFPED, UNCCI, KACITA, PSFU, UMA,UIA, URSB, among others were also collected through a Focused Group discussion. Secondary data was got from review of relevant literature which included; previous researches done by URA like the informal sector report, HNWIs, TADAT, CVP, Tax to GDP, Culture survey, URA health survey report, among others. Statistical tables were got from URA statistical data bases and MoFPED projections. Other Revenue agencies’ Corporate Plans including Kenya Revenue Authority, Tanzania Revenue Authority, Mauritius Revenue Authority and South Africa Revenue Services were bench marked for best practice.
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 13 URA CORPORATE PLAN 2016/17 - 2019/20
14 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20 2.0 ORGANISATIONAL HEALTH ASSESSMENT
An organizational health assessment was conducted, key stakeholders engaged and several survey reports reviewed to identify organizational Pains (Weaknesses and Threats) and the Enablers (Strength and Opportunities). Below are the summarised Pains and Enables.
2.1 SWOT Analysis Results
Strengths Weaknesses
1. URA has built a good brand. 1. Ineffective taxpayer education and Complicated tax literature.
2. Improved business processes & systems 2. Planning weaknesses (weak compliance to the strategy, lack of involvement in the strategy formulation, Poor budget 3. Professional and accountable Leadership allocation and Poor implementation of strategy and lack of clear ownership on the strategy initiatives). 4. URA has young staff that are willing to learn. 3. Human resource (Staff competence framework, Very flat staff structure, Inappropriate staff development (Staff levels)
4. Stake holders (Uncoordinated stakeholder management
5. Inadequate client relationship management
6. Lack of data management framework
7. Ineffective communication of the strategy coupled with poor reading culture.
8. Prioritization (certain Programmes do not get funded) hence poor budget allocation.
Opportunities Threats
1. Increase in the levels of literacy 1. Customs Union taking away Customs department out of URA
2. Government push to Integrate 2. Large informal sector technology process 3. E-Commerce (Absence of audit trail, Jurisdiction issues, 3. Untapped potential in agriculture Capacity, suppression of Sales)
4. Emerging markets 4. Disadvantages of regional integration and groupings
5. Favourable business environment 5. IT security, Stability, Reliability, & Availability (Peace, liberal economy, and untapped resources) 6. Employee mobility due to pull factors
6. Exchange of information (EOI) among 7. Political Developments EAC and Outside different agencies and Revenue Authorities. 8. Political Compromise (VAT incentives in oil sector, Income tax exemptions on SACCOs, USAID affiliated institutions, and 7. M- commerce and E-commerce reduce other Tax incentives) informality 9. Non-involvement of URA in international agreement 8. Increased public private partnership negotiations
10. Civil disobedience
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 15 URA CORPORATE PLAN 2016/17 - 2019/20
Statistical analysis of some of the threats and weakness The analysis in this sub-section focused on the external condition and organizational weaknesses, challenges and threats that will hinder URA’s ability to achieve the overall strategy and objectives. These include: Inadequate funding URA funding had a minimal increase of 1.36% from UGX235.32Bn in FY2014/15 to UGX238.53Bn in FY2015/16 on account of external funding. The resources available are not enough to cater for priority areas and enable URA mobilize revenue through implementation of strategic initiatives. For example, the unfunded priorities for FY 2015/16 amounted to UGX 55.11Bn, while the total unfunded priorities for FY 2016/17 amounts to UGX 111.03 Bn.
Table 5: Comparative analysis of MTEF to Net collections with Tax to GDP ratios FY Net URA Collections(Bn) Tax-to-GDP Ratio (%) MTEF(Bn) MTEF-to-Net collections ratio (%) 2011/12 6,208.00 10.45 115.77 1.86 2012/13 7,149.00 11.19 207.12 2.90 2013/14 8,031.00 11.74 211.05 2.63 2014/15 9,715.60 12.92 235.32 2.42 2015/16 11,435.3 13.68 238.53 2.11 2016/17 13,857.2 14.95 278.36 2.01 2017/18 16,413.3 15.97 284.09 1.73 2018/19 19,384.3 16.98 324.24 1.67 2019/20 22,846.5 18.00 364.53 1.60 Source: URA data bases and Projections based on NDPII figures Low tax to GDP ratio. Uganda’s tax to GDP ratio is rather low. As at FY 2014/15, it was at 12.92% which is significantly below the average of Inter American Centre for Tax Administration (CIAT) (21.3%) or Organisation for Economic Corporation and Development (OECD) countries (25.7%), sub Saharan Africa (15.8%)1or EAC countries (14.61%). Low VAT performance Uganda has the lowest efficiency of VAT tax collection compared to other EAC countries as shown in the table below:
Table 6: VAT Revenue Performance in EAC Countries Country Standard VAT Rate C-Efficiency Uganda 18 28.6 Burundi 18 81.7 Kenya 16 44.4 Rwanda 18 41.7 Tanzania 18 45.7 EAC Average 48.4 Source: IMF 2013
16 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
Low tax base Low taxpayer to labour force ratios imply a low participation rate in the tax system and therefore indicate a weak tax base. Uganda has a low tax base as illustrated in the table below. Income tax’s ratio is 0.09% compared to Kenya (37.30%) and South Africa (83.00 %). Taxpayer to labour force ratio for VAT is still low compared to Kenya (2.31%) and South Africa (3.28%).
Table 7: Taxpayer to labour force ratio (%), 2014 Country Income tax VAT
Burundi 0.03 0.03
Kenya 37.30 2.31
Tanzania 5.88 0.09
Uganda 0.09 0.10
Rwanda 1.09 0.19
Seychelles 27.31 1.75
Mauritius 31.37 3.28
South Africa 83.00 3.28
Low staff to taxpayer ratio Staff coverage is an indicator of the tax administration’s size and its ability to cover all the eligible taxpayers. Population and taxpayers in relation to staff are indicators for administrative potential in the country to reach both potential and registered taxpayers in order to avoid revenue losses because of low enforcement levels. Taxpayers to staff and population to staff coefficient, 2014
On average, I staff serves 275 taxpayers. This is high compared to the number of taxpayers served by one staff in Seychelles and Mauritius. Looking at the population to staff coefficient, Uganda still has the highest coefficient. This implies that I staff on average has to serve 16,259 people compared to the number of people served by staff in Seychelles and Mauritius.
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 17 URA CORPORATE PLAN 2016/17 - 2019/20
2.2 PESTEL (Operating Environment) Introduction The PESTEL (Political, Economic, Social, Technological, Environmental and Legal) framework which is a tried and tested environmental scanning tool was be used to review the operating environment because revenue administration has to take the environment into account. Below are the summarized results from PESTEL analysis.
Areas Key factors to consider Political Factors 1. Instability in key trade partners such as South Sudan. 2. Lack of Political support to tax system and improvement
3. Defiance Campaign by MPs and party leaders as this has currently resulted into a drop of sales from UMA members by about 30%. This trend is likely to continue until the time of swearing in.
4. URA is being branded as part of the current regime and the dissatisfactions on the cur- rent elections among people more especially from Kampala is likely to affect revenue collection.
5. Regional and global developments: Companies within the region are ceasing to be multinationals because of regionalising. Revenue from COMESA countries has dropped by about 74%.
6. The likely impact of the US political environment on revenue collection.
7. The pull back of donors because of their perceptions on governance structures in Ugan- da is likely to affect NGOs and government projects which directly affects PAYE and VAT through reducing on consumption. For example after moved away from the north, PAYE dropped significantly since most of the projects were closed.
Economic Factors 1. Behaviour of Macroeconomic variables (GDP, Inflation, Exchange rates etc) 2. Free Trade zones
3. Developments in oil, Gas and other minerals
4. Trade partnerships
Socio-Economic 1. Low Literacy levels in taxation both in the general public and policy makers such as judi- factors ciary, parliamentarians etc.
2. Unproductive labour force as majority are in agriculture
3. Wealth distribution (Taxation is largely on the middle income group, those at the top of the ladders and those at the bottom are not meeting their tax obligations)
4. Unemployment trends affecting PAYE
5. Health trends affecting productivity of the population.
6. Poor tax paying Culture affecting compliance.
7. Land system that does not facilitate the taxation of real estate sector
8. Lifestyle (How do we make use of life style audits)
9. Demographic age of population (Uganda has one of the youngest population)
10. Globalization/ Regional blocks
11. Social Groupings/ Cultural leaders. (How to tap in their influence)
18 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
Technological 1. Speed of technological change Factors. 2. M-Commerce and E-commerce, E-PAY are on the rise.
3. Changing technology affects URA procedures.
4. High dependency on technology that implies Increase in storage capacity. Dynamism of technology. Environmental 1. Waste Management is generating a lot of money that needs to be taxed. factors 2. Degradation
3. Pollution
4. De-forestation
5. Changing seasons affecting agricultural production and hence revenue from the sector.
6. Carbon credits
7. National Environmental standards
Legal Factors 1. Tax Laws are not keeping up with the change in technology 2. The legal regime does not address the needs of business to political environment.
3. Harmonisation of Intra-Regional laws.
4. Tax laws are not appropriate for our tax administration.
5. The legal frame work is too complex.
6. Multiplicity of taxation laws (too many laws imposing very many taxes)
7. Business environment out pacing legal regime
8. The process of developing laws is flawed.
9. No legal regime for taxation of agro forestry.
10. Tax treaties are negotiated without URA.
A summary of the key selected macroeconomic indicators is provided in Table 8 below
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 19 URA CORPORATE PLAN 2016/17 - 2019/20
Table 8: Macroeconomic Outlook FY 2015/16 – FY 2019/20 Projections 2015/16 2016/17 2017/18 2018/19 2019/20 Real GDP 5.8 5.9 6.4 6.7 6.8 GDP Deflator 5.1 4.7 4.3 4.1 4.2 CPI (Period Average) 5.5 5.8 5 5 5 Revenue (% of GDP) 13.5 14 14.6 15.1 15.5 Investment (% of GDP) 35.3 35.5 37.1 36.8 37.1 Savings (% of GDP) 24.1 22.8 23.7 22.8 22.8 External Current Account Balance (% of GDP) -11 -12.4 -13.1 -13.8 -14 Public Gross Nominal Debt (% of GDP) 34.8 37.6 40 51.1 41.6 Gross International reserves (months of next 3.9 4 4 4.1 4.4 year’s imports) GDP Per Capita (USD) 688 703 729 770 811 Source: IMF report 2015 and NDPII
Table 9: EAC countries’ Tax to GDP ratios Country 2011/12 2012/13 2013/14 2014/15
Kenya 21.5% 21.9% 22.1% 18.7%
Rwanda 13.9% 14.5% 14.9% 15.1%
Tanzania 15.8% 16.0% 16.9% 17.1%
Uganda 10.4% 11.2% 11.7% 12.9%
Burundi 16.3% 15.1% 13.6% - Source: EARATC reports (After rebasing)
20 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 21 URA CORPORATE PLAN 2016/17 - 2019/20 3.0 URA’S STRATEGY
The high level Strategy of URA is summarized into her Mission, Vision, Core values, Culture (URA Way) and Promise to Clients as indicated below.
“To Provide Excellent Revenue Services with Purpose and Passion”
Excellent Service means that while facilitating taxpayers in meeting their tax obligations, and providing revenue related information to stakeholders, URA shall exceed client expectations at all times. Service with purpose means that staff shall continuously put a sense of reason in their actions and will exhibit un-wavered commitment when questioning and changing what may not be going on well. Service with passion means; readiness to ride against any contrary tide in pursuit of excellence, enthusiasm about work assignment and Individual/ team commitment towards excellence.
“To be a model of best practice and Innovation in Revenue Services”
This postulates URA as a centre of excellence, seeking out best practices in and beyond the industry and fostering a culture of Innovation. This calls for a strong commitment to promote individual novelty and readiness to share best practices locally and internationally. • Best practice: shall be judged in comparison with other revenue agencies in the sub-Sahara region. However, due to data limitations, some comparisons will be based on regional and national figures. • Innovation: Shall mean efforts by the URA to continuously improve her revenue services. This could either be new initiatives or improvements on the existing initiatives.
Core values - norms that are cherished and bind us together are; Excellence - We pledge to offer quality service through continuous improvement and innovation in order to exceed client expectations. Excellence - “Refers to excellence in service, Client/customer care, image and presentation” • We deliver what we promise-and add value that goes beyond what is expected. • We develop creative solutions and put them into action.
22 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
• We demand more of ourselves than our clients do • We execute our service with passion, consistence, adaptability, and empathy
Integrity - We shall consistently serve our clients with impeccable conduct, paying attention to rules and regulations and taking responsibility for our actions. This calls for; living a life worth emulating where those around us yearn for our actions other than our words. We promote transparency, trust, honesty, reliability and consistency in all we you do. • We are transparent, honest and ethical in all our dealings with all stakeholders. • We conduct our business in with high standards of professionalism. • We maintain a workplace in which the safety, and dignity of each individual is valued • We ensure compliance with laws, rules and regulations with respect and effective communication
Team work - We shall promote team effort, interdependence and trust in the execution of our duties and build on the partnerships to achieve our set goals. This will help us harness individual efforts, competencies, talents and ideas for a common goal, build partnership with groups, associations, agencies, ministries and other stakeholders and to foster learning, continuity and sustainability of knowledge. • We move in one common direction and align our resources to it. • We readily share knowledge, experiences, resources and opportunities in executing our strategy. • We build strategic partnerships with groups, agencies in executing our strategy
Respect - We believe that everybody matters; we shall therefore highly esteem our clients while delivering a responsive service. This entail; valuing yourself and others, treating others like you would want to be treated and delivering an impartial service • We value human dignity • We embrace unique talents, skills, talents, viewpoints, and life backgrounds. • We treat others as we expect to be treated
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 23 URA CORPORATE PLAN 2016/17 - 2019/20
URA Culture Statement
For any community, society or group to achieve a common vision, they must have specific values and behaviours. The way URA staff interact amongst themselves and with others outside the organization defines who we are and gives us an identity as an organization, making our culture distinct from others.
URA’s Promise to Clients
Dear esteemed clients, We promise excellent revenue services everywhere, all the time at the lowest cost to you
Client Value Propositions
Key Concern Type Propositions
Operate Simple business processes
Functionality Easily accessible services and service points
High level of transparency & accountability in service delivery Service Attributes Quality Offer high quality services that meet client expectations
Timeliness Timely service delivery within the set service standards
Cost Minimize the cost of taxpayer compliance Services driven by client focused relationship Relationship Equity Fairness to all clients at all times Image Integrity Operate with professionalism and integrity
24 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
3.1 Overarching Strategy Our overall Strategy is “Cultivate a taxpaying culture through provision of Reliable services, Leadership development and Building Strategic Partnerships”
Strategic Result: Maximum Tax Revenue (UGX. 22.85 Trillion by the end of FY 19/20)
3.2 Strategic Themes and Results In this corporate plan we shall focus on three pillars of excellence which we believe will collectively create value and contribute to the realization of the Mission and Vision. These are; process efficiency, productive partnership and quality people.
Strategic Theme Commentary Theme Result
Focus is on transforming all business Less dependency on individuals processes to make them simple, achieve Process Efficiency , increased Process maturity and process integration, IT reliability and better service delivery improve business process management
Increased compliance , increased Focus is on cultivating productive, visibility in informal sector , Productive Partnership reliable, consistent, accurate & integrated business operations reciprocal Partnerships environment Focus is on improving institutional Increased productivity , effective capacity, optimizing talent performance management Quality People management and improving staff , leadership pool , improved integrity compliance & service delivery
3.3 Strategy Mapping The Objectives are linked in a cause – effect relationship to create a Strategy Map. The URA Strategy Map demonstrates the value generation chain through the identified linkages between Strategic Objectives. It is a communication tool and a visual representation of strategy. The combined Theme map indicates all areas of improvement that URA needs to pursue to attain the desired results. Related theme objective are consolidated to derive strategic objectives as shown in the Strategy map.
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 25 URA CORPORATE PLAN 2016/17 - 2019/20
URA’s Strategy Map
3.4 Objectives and initiatives Our Scorecard shows the areas of improvement (Objectives) that we shall emphasize in order to address the concerns (Pains) that were identified through environmental scanning, Stakeholder engagements and review of several survey reports. It also puts forward interventions that we shall implement in order to tap into our strength and opportunities (Enables) that were identified through the same process. We shall use our strength to counteract the threats. A total of 6 objectives on the critical path will be pursued in this Corporate Planning period, with 5 leading objectives and 1 outcome objective. These are: Maximize Revenue, Improve Compliance, Improve Quality of Service, Optimize Stakeholder Relations, Transform Our Processes and Improve Our People
26 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
3.4.1 Maximize Revenue The outcome objective of URA is to maximize revenue in order to facilitate Government in reducing donor dependency. We shall strengthen timely revenue reconciliation and reporting. We shall strive to put our scarce resource to optimal use by ensuring financial prudence at all times so as to derive maximum outputs from resource deployment. We shall further strengthen timely revenue reconciliation and reporting; timely management of objections and disputes resolution; and monitoring of revenue collections.
3.4.2 Improve Compliance Compliance in Tax administrations is about registration, filling, payment and declaration. It’s also about compliance with tax and customs laws, regulations and guidelines. The compliance model will assist us in understanding the factors that influence taxpayer compliance behavior and enable us to choose the most appropriate actions to achieve long- term compliance. The model will also enable us to improve long-term voluntary compliance and create an environment that promotes compliance. We shall implement a comprehensive Joint risk compliance strategy, implement a comprehensive Tax Education strategy, Strengthen Debt Recovery & Litigation and implement the Tax Register Expansion Programs
Figure 5: Components of the Compliance Model
Source: Australian Tax Office (ATO)
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 27 URA CORPORATE PLAN 2016/17 - 2019/20
3.4.3 Improve Quality of Service If we are to improve compliance and ultimately maximize revenue, we need to improve the experience that our clients encounter when they interact with us. We are a client focused and responsive organization and therefore we shall strive to live this and even exceed clients’ expectations all the time. We shall Implement Client Support & customization initiatives, Implement Trade facilitation initiatives, Implement the model service centre concept, Strengthen Public relations initiatives and Implement tax payer appreciation initiatives.
3.4.4 Optimize Stakeholder Relations Tax administration is an enormous task that we cannot manage alone and therefore need to bring to our side different partners. As such, different stakeholders will be engaged with a view of strengthening relations with them to enable us improve voluntary compliance. We shall develop and implement comprehensive stakeholder management programs, strengthen relations agencies to conduct joint enforcement operations and support the implementation of legislation, empower different groups of stakeholders to support URA in reaching to taxpayers to meet their tax obligations, collaborate with state revenue agencies and other government entities to exchange data and information, establish consultative platforms for selected groups to provide input to improve tax administration and further engage Government of Uganda and development partners to resource strategic priorities.
3.4.5 Transform Our Processes We need to continually improve our processes in order to make it easy for our clients to meet their tax obligations and be able to increase the taxpayer register. Processes that we need to excel at were identified and all efforts are going to be made to improve them. We shall operationalize the risk management framework, Implement Business process management programs such as process simplifications, process documentation and standardization, Tax procedure code, data quality enhancement initiatives, system reviews etc.; Implement the IT services management program, develop and maintain IT Based integrated business solutions, implement IT security enhancement programs and IT services performance management programs.
28 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
3.4.6 Improve Our People Staff are the roots of any organization and nothing tangible can be achieved if we ignore our people. It is the staff that interact with the processes in order to deliver a quality service that we desire our esteemed clients to experience. We shall implement a robust staff recruitment program, implement a comprehensive staff training program, implement enriched staff maintenance programs and implement structural review and alignment to strategy.
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 29 URA CORPORATE PLAN 2016/17 - 2019/20
3.5 Corporate Scorecard 2016/17 – 2019/20
Baseline 4 Year No Objective Measures Initiatives (14/15) Target
Total Revenue a. Strengthen timely revenue 1.1 9.716 Trn 22.846Trn Collected reconciliation and reporting b. Strengthen timely man- Maximize 1 Tax agement of objections and Revenue Administration disputes resolution 1.2 2.30% 2.30% Costs as % of Revenue c. Strengthen monitoring of revenue collection
Position of a. Implement a comprehen- 2.1 national Rank 5 Rank 1 sive Joint risk compliance influence strategy Compliance level b. Implement a comprehen- 2.2 69% 80% Improve (Tax & Customs) sive Tax Education strategy 2 Compliance Proportion of c. Strengthen debt recovery the risk based and Litigation 2.3 compliance 54% 65% d. Implement TREP III programme implemented
Client 3.1 77% 85% a. Strengthen Public relations Satisfaction level initiatives Average b. Implement tax payer turnaround time 3.2 a) 3.4 days 1.2 days appreciation initiatives (Time doesn’t Improve exceed 7 days c. Implement Client Support 3 quality of and customization initiatives service Average 30 days, d. Implement Trade facilitation turnaround time CIT initiatives 3.2 b) 36 days (Time exceeds 7 objections e. Implement the model days 90 days service centre concept
Proportion of agreed partnership expectations/ 4.1 actions - 100% implemented as per the Optimize MOUs/written Develop and implement a 4 Stakeholder commitment comprehensive stakeholder relations management programs Proportion of stakeholders involved in URA 4.2 interventions - 100% (revenue and non-revenue related)
30 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
Business Process 5.1 Level 1 Level 3 Maturity Level
Number of unplanned 25 (16 ASY- system Maxm. 12 5.2 CUDA, 8 email downtimes annually service, 1 e-tax) (Those lasting over 30 minutes)
System a. Implement Business Process 5.3 meantime to management programs recover b. Implement IT services man- agement program e-Tax (69% dependency), c. Implement IT services 3.7 hours ASYCUDA world performance management (across all (63%), ASYCUDA program Transform 5.3 a) stations for 2 hours 5 ++ (19%), ECTS processes network avail- (19%), Microsoft d. Develop and maintain IT ability) Exchange (email based integrated business system) - 100% solution
Domain services e. Implement IT security en- (All critical hancement program processes 5.3 b) 1 hour depend on this - 100% dependency)
Sunsystems 5.3 c) (6%), n-CEN (3%), 4 hours Procnet (3%)
CURES (3%), TEVIES (3%), 5.3 d) 8 hours Scanning software (3%)
Staff productivity 6.1 84% 100% level a. Implement a robust staff Staff motivation recruitment program 6.2 80% 85% level b. Implement a comprehensive staff Training program Improve 71% 6 c. Implement enriched staff our people (Perception Staff integrity survey) maintenance programs 6.3 80% level EABI score d. Implement Structural review 15 out of 100 and alignment to strategy (85%)
Employee 6.4 91% 100% stability level
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 31 URA CORPORATE PLAN 2016/17 - 2019/20
32 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20 4.0 ENTERPRISE RISK MANAGEMENT
In the current dynamic business environment, risks are no longer merely hazards to be avoided, but in many cases, opportunities to be embraced. Risk creates opportunity and that opportunity creates value, which enables the organization to achieve its objectives. In this four (4) year plan, risks identification is in-built in business processes. The identification and management of risks is fundamental to the realization of URA’s corporate objectives. Risk management shall therefore be embedded into URA’s critical business activities, functions and processes. Risk understanding and tolerance to risk shall be key considerations in decision making. Uganda Revenue Authority is aiming at ensuring full implementation of Enterprise risk management during the corporate plan period FY 2016/17-2019/20. The success will be driven by both the board and senior management support. Enterprise risk management is a culture that needs to be embraced by all players in the chain to ensure its successful implementation. URA has developed an Enterprise wide risk management framework which outlines the Authority’s overall guidelines for risk management. Subsequently, the Authority has identified various uncertainties and untapped opportunities that are embedded in the organization’s strategic intent. The Authority will continuously evaluate how these risks manifest in operational and tactical levels of its business during the Corporate Planning period (2016/17 -2019/20). In addition, the Authority shall develop initiatives necessary to ensure that the strategic risks do not affect the achievement of its Vision, Mission and strategic objectives. a) The following key strategic risks have been identified that will be addressed during this period which may affect the implementation of this corporate plan. b) Tax compliance risks – These relate to gaps in registration, filing, declaration, reporting and payment of taxes. In addition, diversion of cargo due to existence of porous borders, complex schemes used by large businesses to evade and avoid taxes, existence of a large informal sector, are risks that need to be mitigated. c) Literacy level risks – These relate to the low literacy levels in the economy which poses a challenge to effectively support the tax payers in fulfilling their tax obligations. d) Human Resource risks–This risk relates to the inability to attract, retain and develop staff; unfavorable work environment in some business areas, poor ethics and values; and poor succession planning and optimal staffing.
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 33 URA CORPORATE PLAN 2016/17 - 2019/20 e) Reputation risk – This risk relates to unfavorable public perception of the Authority and thereby impacting negatively on the taxpayers’ compliance with their obligations. f) Financial Resource risk - This risk is associated with uncertainty in funding Strategic initiatives. g) Procurement risks – This relates to procurement laws that are rigid and affect timely execution of interventions and impact on budget absorption. h) Stakeholder’s Support risk – Inadequate support to external stakeholders could hinder the Authority’s efforts to enhance tax compliance especially when stakeholder expectations are not met. i) Revenue collection pressure – These risks relate to pressure to meet revenue targets to meet government’s financial obligations for service delivery and meeting development Goals.
34 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 35 URA CORPORATE PLAN 2016/17 - 2019/20 5.0 STRATEGY MONITORING AND EVALUATION (M&E)
“What gets measured gets done” and “What cannot be measured, can’t be managed.”
Figure 5: Results Chain
In order to improve Corporate Accountability and enhance institutional efficiencies, continuous monitoring of URA strategy shall be conducted to assess strategy execution and its relevance to the achievement of the planned results and outcomes. The URA monitoring and evaluation framework is based on the result value chain from inputs, processes, outputs and outcomes under each perspective that collectively deliver the intended strategic objectives. The framework will also provide a clear basis for monitoring the contributions of the various strategic measures that are linked to strategic objectives. The monitoring of this corporate plan will be coordinated as a corporate function under the Corporate Performance Reporting, M&E section in the Research, Planning & Development division. • To ensure effective coordination of the M&E framework within the Authority, the Corporate Performance Reporting, Monitoring & Evaluation section will be responsible for: • Providing a framework, including standardized templates, for reporting on a quarterly, semiannual and annual basis. • Generating, maintaining and reviewing a set of performance measures drawn from the M&E framework. • Carrying out periodic visits to projects and Business areas to ensure reported implementation conforms to facts on the ground. • Co-ordinate meetings to review progress and resolve issues that may arise in the implementation. Provide relevant reports to senior management to ensure that management is fully updated on the plan implementation
36 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
The Plan identifies a set of 16 Key Measures below to be monitored.
Baseline 4 Year S/N Objective URA Measure 16/17 17/18 18/19 19/20 (14/15) Target
Total Revenue 9.716Trn 22.846 Trn 13.857Trn 16.413Trn 19.384Trn 22.846Trn Collected Maximize 1 Revenue Tax Administration Costs as % of 2.30% 2.30% 2.80% 2.90% 2.30% 2.30% Revenue
Position of national Rank 5 Rank 1 Rank 5 Rank 4 Rank 2 Rank 1 influence
Compliance level Improve 69% 80% 71% 74% 77% 80% 2 (Tax & Customs) Compliance
Proportion of the risk based compliance 54% 65% 80% 90% 95% 100% programme implemented
Client Satisfaction 77% 85% 80% 82% 84% 85% level
Average turnaround time Improve 3.4 days 1.2 days 2 days 2 days 1.2 days 1.2 days (Time doesn’t 3 quality of exceed 7 days service 30 days, 30 days, 30 days, 30 days, 30 days, Average turn- CIT objec- CIT ob- CIT ob- CIT ob- CIT ob- around time (Time 36 days tions 90 jections jections jections jections exceeds 7 days days 90 days 90 days 90 days 90 days
Proportion of agreed partnership expectations/ actions - 100% 75% 85% 95% 100% implemented (as per the MOUs/ written Optimize commitment) 4 Stakeholder relations Proportion of stakeholders involved in URA - 100% 80% 85% 90% 100% interventions (revenue and non- revenue related)
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 37 URA CORPORATE PLAN 2016/17 - 2019/20
Business Process Level 1 Level 3 Level 3 Level 3 Level 3 Level 3 Maturity Level
Number of 25 (16 unplanned system ASYCUDA, Maxm. 12 downtimes (Those 8 email annually lasting over 30 service, 1 minutes) etax)
System meantime
to recover
e-Tax (69% dependency), ASYCUDA world 3.7 hours (63%), ASYCUDA (across all Transform stations for 2 hours 2 hours 2 hours 2 hours 2 hours 5 ++ (19%), ECTS processes network (19%), Microsoft availability Exchange (email system) - 100%
Domain services (All critical processes depend 1 hour 1 hour 1 hour 1 hour 1 hour on this - 100% dependency)
Sunsystems (6%), n-CEN (3%), 4 hours 4 hours 4 hours 4 hours 4 hours Procnet (3%)
CURES (3%), TEVIES (3%), Scanning 8 hours 8 hours 8 hours 8 hours 8 hours software (3%)
Staff productivity 84% 100% 88% 93% 97% 100% level
Staff motivation 80% 85% 82% 83% 84% 85% level
Improve our 6 71% people (Perception survey) Staff integrity level 80% 78% 78% 79% 80% EABI score 15 out of 100 (85%)
Employee stability 91% 100% 100% 100% 100% 100% level
38 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
Revenue collections are projected to grow
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 39 URA CORPORATE PLAN 2016/17 - 2019/20 6.0 REVENUE PROJECTIONS
6.1 Revenue Projections for 2016/17-2019/20 Revenue collections are projected to grow from UGX 11.3 trillion in FY 2015/16 to UGX 22. 85 trillion in FY 2019/20 representing over 100% growth in revenue over the period. For projected annual targets, refer to the table below.
Table 10: Revenue Collection Forecasts GDP Est., Base 2009 Net URA Collections Financial Years Tax-to-GDP Ratio (UGX Bn) (UGX Bn) 2011/12 59,420 6,208.00 10.45% 2012/13 63,905 7,149.00 11.19% 2013/14 68,407 8,031.00 11.74% 2014/15 75,183 9,715.60 12.92% 2015/16 83,596 11,435.3 13.68% 2016/17 92,668 13,857.2 14.95% 2017/18 102,782 16,413.3 15.97% 2018/19 114,129 19,384.3 16.98% 2019/20 126,925 22,846.5 18.00%
Revenue Projections for 2016/17-2019/20 per tax head The table below shows the distribution of revenue forecasts required to achieve 18% Tax to GDP Ratio.
Table 11: Tax-head Distribution (UGX Bn) FY2015/16 FY2016/17 FY2017/18 FY2018/19 FY2019/20
Taxes on international Trade 5,320.58 6,336.52 7,505.38 8,863.92 10,447.11
PAYE 1,930.18 2,298.74 2,722.78 3,215.63 3,789.97
Income tax 947.65 1,128.61 1,336.79 1,578.76 1,860.75
Withholding Tax 623.88 743.00 880.06 1,039.36 1,225.00
Tax on Bank Interest 291.76 347.47 411.56 486.06 572.88
Casino and Lottery Tax 13.12 15.63 18.51 21.86 25.76
Excise duty 741.62 883.23 1,046.15 1,235.51 1,456.19
Value Added Tax: 1,845.99 2,198.48 2,604.01 3,075.36 3,624.66
Fees and Licenses 235.43 280.38 332.10 392.21 462.26
Net URA collections 11,635.42 13,857.17 16,413.30 19,384.26 22,846.50
40 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
Revenue Projections for 2016/17-2019/20 per sector
Table 12: Sector Distribution of Revenue Forecasts (UGX Bn) Sector 2015/16 2016/17 2017/18 2018/19 2019/20
G - Wholesale and retail trade; repair of motor 2,889.49 3,441.23 4,076.01 4,813.80 5673.60 vehicles and motorcycles
C - Manufacturing 2,863.10 3,409.79 4,038.77 4,769.83 5621.77
K - Financial and insurance activities 1,114.68 1,327.52 1,572.40 1,857.02 2188.70
J - Information and communication 1,103.92 1,314.71 1,557.22 1,839.09 2167.58
O - Public administration and defense; compulsory 699.15 832.65 986.24 1,164.76 1372.80 social security
D - Electricity, gas, steam and air conditioning 398.75 474.89 562.49 664.30 782.96 supply
B - Mining and quarrying 293.79 349.89 414.43 489.45 576.87
F - Construction 288.35 343.41 406.75 480.38 566.18
H - Transportation and storage 250.82 298.71 353.81 417.86 492.49
Q - Human health and social work activities 221.88 264.25 313.00 369.65 435.68
P - Education 204.37 243.40 288.29 340.48 401.29
S - Other service activities 194.14 231.21 273.86 323.43 381.20
L - Real estate activities 154.90 184.48 218.51 258.06 304.15
M - Professional, scientific and technical activities 147.77 175.99 208.45 246.18 290.15
I - Accommodation and food service activities 146.61 174.61 206.81 244.25 287.87
N - Administrative and support service activities 149.43 177.96 210.79 248.94 293.41
A - Agriculture, forestry and fishing 94.55 112.61 133.38 157.52 185.66
E - Water supply; sewerage, waste management 62.60 74.55 88.31 104.29 122.92 and remediation activities
U - Activities of extraterritorial organs and bodies 29.71 35.39 41.91 49.50 58.34
R - Arts, entertainment and recreation 33.86 40.32 47.76 56.40 66.48
T - Activities of households as employers; undifferentiated goods- and services-producing 3.41 4.06 4.81 5.68 6.69 activities of households for own use
Others (Not sectored) 290.15 345.55 409.30 483.38 569.72
Grand Total 11,635.42 13,857.17 16,413.30 19,384.26 22,846.50
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 41 URA CORPORATE PLAN 2016/17 - 2019/20
Sector GDP Projections
Table 13: GDP Projections per Sector Sector 2015/16 2016/17 2017/18 2018/19 2019/20
A - Agriculture, forestry and fishing 20,313.83 22,518.32 24,976.03 27,733.35 30,842.78 G - Wholesale and retail trade; repair of motor 11,324.82 12,553.81 13,923.96 15,461.15 17,194.63 vehicles and motorcycles
C - Manufacturing 8,039.25 8,911.69 9,884.33 10,975.55 12,206.11
F - Construction 5,660.82 6,275.14 6,960.02 7,728.40 8,594.90
P - Education 4,445.64 4,928.08 5,465.95 6,069.38 6,749.87
L - Real estate activities 3,512.39 3,893.56 4,318.51 4,795.27 5,332.91
J - Information and communication 3,254.17 3,607.32 4,001.04 4,442.74 4,940.86
M - Professional, scientific and technical 2,550.36 2,827.13 3,135.69 3,481.86 3,872.25 activities
Q - Human health and social work activities 2,590.89 2,872.06 3,185.52 3,537.20 3,933.78
O - Public administration and defence; 2,492.65 2,763.16 3,064.73 3,403.08 3,784.63 compulsory social security
H - Transportation and storage 2,214.00 2,454.27 2,722.13 3,022.65 3,361.55
I - Accommodation and food service activities 2,188.14 2,425.60 2,690.34 2,987.35 3,322.29
K - Financial and insurance activities 2,131.86 2,363.21 2,621.14 2,910.51 3,236.83
E - Water supply; sewerage, waste management 1,436.12 1,591.97 1,765.72 1,960.65 2,180.47 and remediation activities
N - Administrative and support service activities 1,350.83 1,497.42 1,660.85 1,844.21 2,050.98
S - Other service activities 873.15 967.91 1,073.55 1,192.07 1,325.72
B - Mining and quarrying 777.69 862.09 956.18 1,061.74 1,180.78
D - Electricity, gas, steam and air conditioning 710.46 787.56 873.51 969.95 1,078.70 supply
T - Activities of households as employers; undifferentiated goods & services-producing 368.79 408.81 453.43 503.49 559.94 activities of households for own use
R - Arts, entertainment and recreation 246.63 273.40 303.24 336.71 374.46
Adjustments 7,113.52 7,885.49 8,746.14 9,711.70 10,800.56
Total 83,596 92,668 102,782 114,129 126,925
42 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
6.2 Projected Sector Tax to GDP Ratios
Table 14: Tax to GDP Ratios per Sector Tax to GDP ratios
Sector 2015/16 2016/17 2017/18 2018/19 2019/20
A - Agriculture, forestry and fishing 0.5% 0.5% 0.5% 0.6% 0.6%
G - Wholesale and retail trade; repair of motor vehicles 25.4% 27.4% 29.3% 30.2% 31.2% and motorcycles
C - Manufacturing 35.5% 38.2% 40.9% 42.2% 43.5%
F - Construction 5.1% 5.5% 5.9% 6.0% 6.2%
P - Education 4.6% 4.9% 5.3% 5.4% 5.6%
L - Real estate activities 4.4% 4.7% 5.1% 5.2% 5.4%
J - Information and communication 33.8% 36.4% 39.0% 40.2% 41.4%
M - Professional, scientific and technical activities 5.8% 6.2% 6.7% 6.9% 7.1%
Q - Human health and social work activities 8.5% 9.2% 9.8% 10.2% 10.5%
O - Public administration & defence; compulsory social 28.0% 30.1% 32.2% 33.3% 34.3% security
H - Transportation and storage 11.3% 12.2% 13.0% 13.4% 13.8%
I - Accommodation and food service activities 6.7% 7.2% 7.7% 7.9% 8.2%
K - Financial and insurance activities 52.1% 56.1% 60.1% 62.0% 63.9%
E - Water supply; sewerage, waste management and 4.3% 4.7% 5.0% 5.2% 5.3% remediation activities
N - Administrative and support service activities 11.0% 11.9% 12.7% 13.1% 13.5%
S - Other service activities 22.2% 23.9% 25.6% 26.4% 27.2%
B - Mining and quarrying 37.6% 40.5% 43.4% 44.8% 46.1%
D - Electricity, gas, steam and air conditioning supply 55.9% 60.2% 64.5% 66.5% 68.6%
T - Activities of households as employers; undifferentiated goods- & services-producing activities of households for 0.9% 1.0% 1.1% 1.1% 1.1% own use
Tax to GDP Ratio 13.68% 14.95% 15.97% 16.98% 18.00%
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 43 URA CORPORATE PLAN 2016/17 - 2019/20
6.3 Underlying Assumptions for Projections i. We target a tax to GDP ratio of 18% by 2019/2020. Assumed to grow at a rate of 1.02% annually. ii. The GDP values have been based on the IMF projections. iii. Tax head distribution of revenue will be in line with the average ratio distribution of total net revenue among the various tax-heads for the last four financial years. This assumption was used to distribute projected total revenue among the various tax-heads. iv. Sectoral distribution of revenue will be in line with the average ratio distribution of total revenue among the various sectors for the last 4 financial years. This assumption was used to distribute projected total revenue among the various sectors of the economy. v. Sector GDP values have been estimated based on the average shares of the most stable years. Years that exhibited outliers for a given sector were not considered in the computations. vi. Number of tax payers required to raise the needed revenue from the different tax heads have been estimated basing on the assumption that Tax revenue depends on number of active taxpayers. Thus a linear trend estimation techniques was adopted. vii. Introduction of oil revenues will not negatively affect the economy but generate a stream of economic benefits that will spur growth in other sectors of the economy. viii. Government and Development Partner financing level to URA will increase to be able finance the recurrent and development programmes needs.
44 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 45 URA CORPORATE PLAN 2016/17 - 2019/20 7.0 FINANCIAL RESOURCE REQUIREMENT
This plan is based on the premise that Government of Uganda (MoFPED) will finance the biggest percentage of URA budget. However, implementing all the planned interventions will require substantial financial resources which are over and above the GOU indicative financing level indicated under the Medium Term Expenditure Framework. URA requires significant investment to complete URA headquarter building, enhance systems functionality and build a seamless platform for service delivery. Building institutional capability in different taxable areas is critical in enhancing taxpayer compliance. Uganda Revenue Authority will therefore seek additional financing from Development Partners to finance the URA development budget. The financial requirement for FY 2016/17 is projected at UGX 353.87 Ie 2.70% of projected revenue collection, higher than the targeted cost of tax administration because of the required capital investment (URA Hqt), Structural review costs and Systems enhancements. From 2017/18 to 2019/20, financial resource are estimated at 2.3% of the projected revenue collections.
Table 15: Projected Financial Resource Requirements in UGX Bn Category FY 2016/17 FY 2017/18 FY2018/19 FY 2019/20
Wage 145.30 148.20 184.27 248.11
Non-Wage Recurrent 122.85 130.78 143.86 158.24
Strategic & Capital Development 121.24 185.51 116.51 119.21
Total 389.39 464.49 444.64 525.56
Table 16: Estimates of Recurrent & Development Expenditure from MTEF Projections in UGX Bn Category FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20
Wage 112.13 118.11 124.02 130.22
Non-Wage Recurrent 108.39 103.47 122.1 134.31
Domestic development 55.66 62.5 78.13 100
External Financing 2.18 - - -
Total 278.36 284.09 324.24 364.53
Source: MoFPED
Funding Gap 111.03 180.40 120.40 161.03
Note: the finding gap is vividly increasing over the four (4) years
46 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
Change management is a critical facet in ensuring successful implementation of any Strategy
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 47 URA CORPORATE PLAN 2016/17 - 2019/20 8.0 CHANGE MANAGEMENT
Change management is a critical facet in ensuring successful implementation of any Strategy. A change management plan has therefore been developed to support the implementation of the corporate plan. It follows the PROSCI Change Management methodology, adopted by URA as highlighted below; a) Prepare for change- Phase 1 Understanding the environment and the key persons impacted is the first step in managing the change process. A clear understanding of this will enable a concrete change plan to be designed. Key here is the stakeholder matrix. The matrix highlights the process of Stakeholder identification, how they are impacted, how do we mitigate the impact, who will mitigate the impact, who can stop the change and strategies required to mitigate the negative consequences. b) Managing the change (transition) - Phase 2 Prior to sign off, intense change management activities must kick in. Development of the following plans with costs and time frames is key; Communication plan and Training/coaching plan. There is need to gain total buy-in from all staff, in that regard, a combination of methods will be deployed to get acceptance. These include; customized strategic communications, stakeholder engagements, use of different communication platforms among others. c) Reinforcing change (Monitoring and Evaluation) – Phase 3 Evaluation of the buy-in will be obtained from the M & E reports conducted as per set timelines. Feedback on adaptability will be used by the Change team to advise new mechanisms to facilitate adoption. Remedial action can therefore be taken promptly ensuring the attainment of the new objectives. Activities to be undertaken include; Proactive collection of feedback from staff, Identification of gaps and areas of resistance, Implementation of corrective actions and celebration of successes.
48 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
“Talent wins games, but teamwork and intelligence wins championships”
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 49 URA CORPORATE PLAN 2016/17 - 2019/20 9.0 CONCLUSION
“Talent wins games, but teamwork and intelligence wins championships” We all need to work together if we are to execute our Strategy and attain success. The Corporate Plan 2016/17 – 2019/20 puts forward robust Strategies and initiatives to be implemented in order to cultivate a taxpaying culture among all Ugandan that will enable the country to attain 18% tax to GDP by 2020. The plan lays down strategies that will be implemented to improve our people, transform our processes and optimize stakeholder relations. This is envisaged to result into improved quality of services to clients, improved voluntary compliance and ultimately maximizing revenue. This plan reflects the aspirations of URA clients and all stakeholders. URA is therefore committed to addressing clients and stakeholders’ concerns.
The NDPII aims at strengthening Uganda’s Competitiveness for Sustainable Wealth Creation, Employment and Inclusive Growth. URA’s corporate plan is therefore be aligned to finance NDP II’s objectives given the overall budget deficit level that has been unstable due to the changing architecture of Official Development Assistance and withholding of external assistance by some development partners. This calls for increased efforts in domestic resource mobilization. The planning, budgeting and M&E functions are critical in making the URA strategy operational and in developing a culture of accountability. Therefore, the annual planning and budgeting process will help us to break down the strategies and to monitor their impact to the desired outputs and outcomes on a quarterly and annual basis. Through the alignment process, every department, division, up to individual staff will pick their contribution to the organization’s strategy to support URA in achieving the desired outcomes. Clear performance expectations will be drawn and agreed on with respective departments and these will inform the M&E and Performance Management functions. Let us walk this journey together.
50 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
Initiatives and Scope for 2016/17 – 2019/20
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 51 URA CORPORATE PLAN 2016/17 - 2019/20 10. ANNEXES
10.1 Initiatives and Scope for 2016/17 – 2019/20
OBJECTIVE INITIATIVE INITIATIVE SCOPE
Implement revenue a. Strengthen timely revenue reconciliation and reporting Maximize management and reporting b. Strengthen timely management of objections and disputes resolution Revenue mechanisms c. Strengthen monitoring of revenue collections
a. Develop a Structured risk assessment mechanism - To assess and prior- itise compliance risk for all core taxes and tax payer industries/sectors/ segments. b. Joint risk identification & assessment c. Industry/Sector based compliance management d. Investigations & Intelligence e. Enforcement & Surveillance f. Implement the National Audit Plan g. Post Clearance Audits h. Post Audit Assessment Program i. Strengthen the AEO program j. Program to counter illicit financial flows
Implement a k. Program for tapping into Natural resources and Minerals wealth comprehensive Joint risk l. Compliance improvement plan focusing on industries/sectors/core tax compliance strategy heads m. Implement Valuation controls n. Operationalize the National Targeting Centre o. Implement the Exchange of Information Improve Com- pliance p. Research into hidden economic activity (e.g. registered and unregis- tered businesses, and buying goods and services in cash and falsifying accounting records to evade tax) & topical compliance issues interna- tionally e.g. transfer pricing and other forms of profit shifting by large taxpayers, aggressive tax planning of high-wealth and high-income taxpayers) q. Implement Fiscal Devices (Electronic tax registers, Electronic fiscal devic- es, Points of sale, points of sale etc) r. Receipt compliance drive s. Extension of ECTS to EAC region
a. Industry/Sector based and by segment Tax Education Implement a o Value chain approach comprehensive Tax b. Customised Tax materials e.g. more local languages (Kakwa, Lugbara etc.) Education strategy c. Influencing the national curriculum d. Using national leaders in tax education
Strengthen Debt Recovery Strengthen Debt Recovery & Litigation & Litigation
Implement the Tax Register Implement the Tax Register Expansion Program III Expansion Program III
52 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
Strengthen Public relations a. Client focused publicity interventions initiatives b. Corporate social responsibility c. Media management
Implement tax payer a. Organize and holdTax payer appreciation days appreciation initiatives
a. Client relationship management (e.g. relationship managers, KYC, hands on support etc.) b. Establish Client access points/service centers (Liaison Offices) – In other agencies, Kyaliwajala, Kyotera, Nansana, Natete etc. c. Operationalize the service catalogue Implement Client Support d. Implement an enterprise wide Contact center Improve quali- & customisation initiatives e. Develop book keeping software for small taxpayers (Mauritius example) ty of service in order to simplify record keeping and reporting arrangements in place for small taxpayers. f. Self-help concept g. Service enablement initiatives h. Develop and implement additional tax payment platforms
Implement Trade a. Complete OSBPs at Katuna and Elegu facilitation initiatives b. Roll out of SCT to EAC region c. Electronic Single Window
a. Complete construction works & set up for URA HQ Building Implement the model service centre concept b. Office Branding services c. Single point of contact concept d. Operationalize the URA mobile office concept
a. Develop & implement stakeholder management guidelines b. Engage Gov’t & development partners to resource strategic priorities c. Collaborate with state revenue agencies and other government entities Develop and implement to exchange data and information Optimize comprehensive stakeholder d. Collaborate with agencies to conduct joint enforcement operations and stakeholder management programs relations support the implementation of legislation e. Empower different groups of stakeholders to support URA in reaching to taxpayers to meet their tax obligations f. Establish consultative platforms for selected groups to provide input to improve tax administration
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 53 URA CORPORATE PLAN 2016/17 - 2019/20
f. Implement Process documentation & Standardization • End to end processes • Documentation of critical and essential processes • Compliance risk management guidelines • Data quality & integrity standards • URA Communication management standards • Service management standards • ICT standards • Office and staff requirements standards. • Business Process Management Standards • Change Management standards • Build a strong, interactive process asset library • Innovations mgt guidelines etc. g. Operationalize the risk management framework h. Implement Tax Procedure Code i. Implement SCT processes as provided under the SCT framework j. Simplify client focused processes Implement Business pro- • Registration, filing, declaration and payment processes to make cess management program them more user friendly. • Design a simplified tax return for small taxpayers to improve compliance. • Ease the process by which taxpayers obtain information from URA • Harmonize domestic laws on VAT with the SCT under the EAC guidelines • Review the VAT refund and arrears management processes. • Remove duplications k. Implement Oil and Gas management. l. Establish URA virtual archives (Records management etc.) Improve our m. Implement the Document processing centre processes n. Implement System integrity enhancement programs e.g. compliance reviews of systems etc. o. Implement Data quality enhancement initiatives - Tax payer registration data base, Duplications p. Implement Systems Upgrades • ASYCUDA (real time alerts, clearance of M/Vs, expand items cleared etc.) • ECTS (Expand items monitored etc.)
a. Service strategy Implement IT services man- b. IT service design agement program c. Service Transition d. Service Operation e. IT service Improvement
a. Enterprise Resource Planning (ERP) Solution Develop and maintain IT b. Data Warehouse/ BI solution Based integrated business c. Enterprise systems/applications bus solutions d. System interfaces with MDAs to facilitate data and information exchange. e.g. URSB, National ID etc. e. e-Tax II
Implement IT security a. ISO certification enhancement program b. etc.
Implement IT services performance management Implement IT services performance management program program
54 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker URA CORPORATE PLAN 2016/17 - 2019/20
a. Review the talent sourcing strategies Implement a robust staff b. Design and implement multiple assessment tools/methods recruitment program c. Review the on-board program
a. Develop and implement structured OJT program Implement a comprehen- b. Develop and implement structured e-learning approach sive staff training program c. Develop and implement competence development model d. Review and implement Leadership development program
Improve our People a. Develop and implement knowledge management initiatives b. Develop and implement Job-fit/placement guidelines c. Review the current motivation program Implement enriched staff d. Implement Wellness initiatives maintenance programs e. Implement URA secondment and attachment policy f. Review and implement the URA Consulting policy g. Implement Career management h. Implement staff integrity enhancement initiatives
Implement structural review and alignment to Implement Structural review recommendations strategy
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 55 URA CORPORATE PLAN 2016/17 - 2019/20
“Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker 57 URA CORPORATE PLAN 2016/17 - 2019/20
A Publication of Uganda Revenue Authority
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58 “Plans are only intentions unless they quickly translate into hard work & results” Peter Drucker