URA CORPORATE PLAN 2020/21 - 2024/25
The Journey to Cultivating a Taxpaying Culture
URA CORPORATE PLAN 2020/21 - 2024/25 Table of Contents
List of Tables ...... iii List of Figures ...... iv Glossary ...... v Foreword from the Minister ...... 1 Foreword from Chairperson URA Board ...... 2 A word from URA Commissioner General ...... 3 URA Board of Directors...... 5 1.1 The overarching Strategy for URA...... 6 Executive Summary ...... 7
1.0 INTRODUCTION...... 9 1.1 Background ...... 9 1.2 Legal Framework for URA...... 10 1.3 The National, Legal and Policy Context...... 10 1.4 Linkage between the Strategic Plan with Global and Regional initiatives...... 14 1.5 Process of Developing the URA Corporate Plan 2020/21 – 2024/25...... 14
2.0 SITUATIONAL ANALSIS...... 15 2.1 Institutional Capacity of URA ...... 15 2.2 Key achievements ...... 17 2.3 Key Plan Implementation Challenges...... 22 2.4 Lessons Leant ...... 23 2.5 SWOT Analysis Results...... 24 2.6 PESTEL (Operating Environment)...... 24
3.0 URA’S STRATEGIC DIRECTION FY 2020/21 – 2024/25...... 30 3.1 URA Vision Statement...... 30 3.2 URA Mission Statement...... 30 3.3 URA Core values...... 31 3.4 URA’s Goal...... 31 3.5 Strategy Map...... 34 3.6 Strategic Objectives and Key Intermediate Outcome Results...... 35
4.0 FINANCING FRAMEWORK...... 40
5.0 INSTITUTIONAL ARRANGEMENTS FOR IMPLEMENTING THE PLAN...... 41
i The Journey to Cultivating a Taxpaying Culture URA CORPORATE PLAN 2020/21 - 2024/25
6.0 COMMUNICATION & FEEDBACK ARRANGEMENTS...... 42
7.0 RISK MANAGEMENT...... 43
8.0 MONITORING AND EVALUATION FRAMEWORK...... 50
9.0 PROJECT PROFILES – URA RE-TOOLING...... 54
10.0 REVENUE PROJECTIONS FY 2020/21-2024/25...... 55
11.0 CONCLUSION...... 56
12.0 ANNEXES...... 58 12.1 URA Results Framework, Outcome Level...... 58 12.2 NDP 111 - URA. Programme Implementation Action Plans ...... 59 12.3 Domestic Revenue Mobilization Strategy Road Map...... 64 12.4 Stakeholder Management...... 67
The Journey to Cultivating a Taxpaying Culture ii URA CORPORATE PLAN 2020/21 - 2024/25 List of Tables
Table 1: Budget Allocation over the Planning Period...... 15 Table 2: Human Resource Capacity...... 16 Table 3: Revenue Performance over the period 2015/16 – 2018/19...... 17 Table 4: Tax to GDP ratios for past 4 years (2015/16 to 2018/19)...... 18 Table 5: Filing Ratios for the period FY 2016/17 – FY 2018/19...... 19 Table 6: Growth in the tax payer register FY 2016/17 – FY 2018/19...... 20 Table 7: Performance progress on Corporate Objectives...... 21 Table 8: URA Objectives and Intermediate Outcomes...... 35 Table 9: URA Interventions and Actions...... 36 Table 10: Summary of Strategic Plan Budget in UGX Bn...... 40 Table 11: URA MTEF Projections for FY 2020/21 – 2024/25 in UGX Bn...... 40 Table 12: Roles and Responsibilities of Major Players...... 41 Table 13: Key Envisaged Risks...... 45 Table 14: URA Revenue Collection Forecasts (UGX Billion)...... 55
iii The Journey to Cultivating a Taxpaying Culture URA CORPORATE PLAN 2020/21 - 2024/25 List of Figures
Figure 1: URA Business Model Canvas (BMC)...... 10 Figure 2: Trend analysis of growth in net revenue from 2015/16 to 2019/20...... 18 Figure 3: Performance of Taxpayers’ Register (UGX Billion) FY 2015/16 - 2018/19...... 20 Figure 4: Results Chain...... 50
The Journey to Cultivating a Taxpaying Culture iv URA CORPORATE PLAN 2020/21 - 2024/25 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
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PM Performance Management PPP Public Private Partnerships RPD Research, Planning and Development 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 URA-Net Uganda Revenue Authority Network VAT Value Added Tax VFM Value for Money WTO World Trade Organization
The Journey to Cultivating a Taxpaying Culture vi URA CORPORATE PLAN 2020/21 - 2024/25 Foreword from the Minister
he Goal of Uganda Vision 2040 is “A transformed Ugandan society from a peasant to a modern and prosperous country” This involves changing from a Tpredominantly low income to a competitive upper middle income country within next 20 years. 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 that is to be mobilized by Uganda Revenue Authority (URA). This requires increased revenue mobilisation efforts particularly through the operationalisation of the Domestic Revenue Mobilisation Strategy (DRMS), which is aimed at reducing debt reliance and keeping debt at sustainable levels. The DRMS will help in striking a balance between competing challenges: • To raise additional revenues to support the government’s Budgetary position; • To encourage a healthy flow of investment; and • To address issues of fairness and transparency in the tax system. URA, established by the URA Statute of 1991 as a central body for the assessment and collection of Tax and Non-tax revenues, has since played a commendable role in delivering on her mandate and hence growth and transformation of the Ugandan economy. This is evidenced through the magnificent achievements since its inception. Some of the most recent achievements include adoption of the alternative dispute resolution (ADR) mechanism that has led to recovery of 200 billion UGX, rolling out of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), Digital Tax Stamps, Non-Intuitive Inspection (scanners); 24-hour surveillance of border posts, Customs auto conversion of IM7 that is combating dumping to mention but a few. Furthermore, Uganda joined the Automatic Exchange of Information (AEOI) on 15th February 2021. The OECD – Global Forum on transparency and exchange of information forum for tax purposes accepted Uganda’s expression of interest to implement the AEOI standard commencing in September 2023 with URA as the delegated competent authority. Therefore, the interventions laid down in the URA Corporate plan FY2020/21-2024/25 are expected to bring Uganda closer to attaining its target of a 18% tax-to-GDP ratio. This will get full support from my Ministry. I therefore urge all stakeholders involved in the implementation of this Corporate Plan to ensure that it is effectively and efficiently implemented because our Country will only attain Economic Independence if we all play our rightful role in this journey. FOR GOD AND MY COUNTRY
Hon. Matia Kasaija Minister of Finance, Planning and Economic Development
1 The Journey to Cultivating a Taxpaying Culture URA CORPORATE PLAN 2020/21 - 2024/25 Foreword from Chairperson URA Board
he launch of this new Corporate Plan is a key milestone for Uganda Revenue Authority and Uganda as a Nation because when well implemented, we Twill be able to finance a greater part of the National Development Plan III aspirations. URA has determined to increase her contribution towards financing Uganda’s Vision 2040 objectives and the National Development Agenda. I am fully confident that the strategic direction we are taking, the priority interventions and actions within this Strategic Plan will propel URA and Uganda into achieving the desired Outcomes. The Board is committed to carrying out its central responsibilities of monitoring performance of the Authority, providing strategic guidance to Management and determining Policies among others. The URA Corporate Plan articulates Its Strategic Vision, direction and promise. Its launch presents us an opportunity to galvanize a culture of tax compliance among clients, while at the same time enhancing corporate governance in URA. We shall continue to devise ways of broadening the tax base, both by identifying new sources of revenue and by being more assertive in ensuring that clients meet their tax obligations fully and in a timely manner. In order to address the challenges, we are faced with, we shall consolidate proactive approaches, while at the same time conceiving new initiatives that can provide a multiplier effect on URA service offerings. The Corporate Plan 2020/21-2024/25 will drive URA towards addressing strategic challenges successfully while ensuring that it continues to offer a transformational revenue service for Uganda’s economic independence. To achieve this, Service Level Agreements will be drawn up and monitored periodically. We shall pursue cooperative relationships by investing in collaborations with different Strategic Partners for better execution of our plan. Launching the forth corporate plan in a 15-year span since restructuring, is a great achievement and demonstrates enhanced professionalism of the Senior Management Team and entire staff of URA in her pursuit to become agile and strive for greater heights. On behalf of the Board, I would like to reiterate the confidence we have in the entire staff body in your various capacities, and appreciate your contributions to the development of Uganda as we implement the strategies and priorities detailed within this Corporate Plan which are aligned to the Government Domestic Revenue Mobilization Strategy, NDP III, and the MDA Strategic Planning Guidelines 2020. I reassure you of the Board’s full commitment and support as you embark on the crucial implementation phases of this Corporate Plan that is envisaged to Mobilise Revenue for National Development in a Transparent and Efficient manner.
Mr. Juma Kisaame
The Journey to Cultivating a Taxpaying Culture 2 URA CORPORATE PLAN 2020/21 - 2024/25 A word from URA Commissioner General
The Corporate Plan for the period 2016/17 - 2019/2020 was a second generation strategy in which URA focused its efforts towards establishing processes, systems and practices directed at enabling the organization achieve its overarching strategy of “Cultivating a taxpaying culture through provision of reliable services, leadership development and building strategic partnerships”. The efforts exerted in implementing the corporate plan, saw Revenue performance URA achieve and surpass performance milestones set out therein. By stretching ourselves, we have also continuously has improved from grown and improved over the corporate period. For example, UGX. 11,237Bn in the despite the COVID-19 pandemic, last financial year we FY 2015/16 to UGX were able to grow revenue by UGX 134 Bn. This has always been with the unwavering commitment from the Board, 16,752Bn in the FY Management and the entire staff as well as continued 2019/20, representing support from Government and Development Partners. a percentage growth in The speed of digitalization and globalization is high and has revenue of 49.08% in the changed the way organizations, businesses & individuals last corporate planning work. The taxation landscape & ecosystems have also become volatile, uncertain, complex and ambiguous; period. therefore, must plot a new strategic path if we are to remain relevant and useful to our country.
For us to continue on our maturity path, we must do the following; Position ourselves to leverage information & technological advancements for compliance improvement and process efficiency;
Using digitalization as a path, we strive to harness our abilities and synergies with our partners to fully engage the future; Seek to better our capabilities by ingraining Patriotism, Integrity and Professionalism in our corporate mindset; Marshal our teams to purpose to reach greater heights.
As the expectations of taxpayers and our other clients continue to evolve, and as our mandate continues to expand, our approach and service mindset needs to evolve. We must continue to change the way we operate, continuously improve the quality of our people, improve process efficiency,
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build productive partnerships whilst always remembering the value that an engaged citizenry brings on board to our work. These are the foundations of our next Corporate Strategy.
I have confidence that we shall be able to execute this plan excellently well by “Mobilizing Revenue for National Development in a Transparent and Efficient manner.” I commend this plan to you and commit to its successful execution.
Mr. John Rujoki Musinguzi
The Journey to Cultivating a Taxpaying Culture 4 URA CORPORATE PLAN 2020/21 - 2024/25 URA Board of Directors
Mr. Juma Kisaame Ms. Loy Tumusiime
Mr. Keith Muhakanizi Ms. Helen Awidi
Mr. Michael Wamibu Mr. John Rujoki Musinguzi
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1.1 The overarching Strategy for URA “Promote a taxpaying culture through engaged citizenry, productive partnerships, The overarching Strategyleveraging for URA technology, data “Promote a taxpaying cultureand innovative through staff” engaged citizenry, productive partnerships, leveraging technology, data and innovative staff ” Strategic Result: Strategic Result Grow revenues to above 44 Grow revenues to above trillion34 trillion by 2024/25 by 2024/25
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URA CORPORATE PLAN 2020/21 - 2024/25 Executive Summary
The corporate plan 2020/21 - 2024/25 is premised on the need to develop an engaged citizenry that will enhance taxpaying culture by engaging taxpayers through, productive partnerships, leveraging technology, data and innovative staff.
An organization assessment and mid-term review of the corporate plan 2016/17 – 2019/20 was carried out with a view of identifying pertinent issues that need to be addressed as well as positive achievements that we need to consolidate and build on to align with the Domestic Revenue Mobilization Strategy. In the process, internal and external issues that we need to take care of were highlighted. Engagements with key strategic partners were also held to identify issues that URA needs to address to achieve its planned outputs and outcomes. As a result of the process, Enablers (strengths and opportunities) and Pains (weaknesses and threats) that were identified have informed the strategies and interventions that are to be pursued in this planning period. We shall also continue implementing critical intervention that are rolling up from the previous Strategy.
URA strategy for this period shall focus efforts on four Strategic Themes which we believe will collectively create value and contribute to the realization of the Mission and Vision. These are; Quality People, Process efficiency, Productive partnerships and Engaged Citizenry.
In order for URA to realize her performance expectations in the different areas, we shall pursue the following objectives:
i. Enhance Corporate Governance - improve coordination of leadership and staff, improve alignment between functions, structures and business and standardize service delivery. It also focuses on building strong collaborations among staff, promoting professionalism among leaders, promoting continuous dialogue among staff and leaders, promoting agility and rallying staff towards a client oriented culture.
ii. Enhance Staff Capacity – increase the level of expertise and knowledge of URA staff, promote continuous learning and career development that is aligned with the organization’s strategic needs. It also focuses on ensuring that employees feel valued and encouraged to participate and communicate openly, takes care of remuneration and rewards, workplace safety, staff welfare, engagement and motivation.
iii. Enhance Organization Infrastructure – ensure that organization infrastructure capacity levels are maintained within allowable limits and that all employees have the work tools required to do their jobs.
iv. Improve process management - improve URA process efficiency through integration, simplification of business processes, promote processes documentation, remove duplications and enhance process governance. Improving process management requires that risk is identified, managed and mitigated and appropriate mechanisms are put in place to manage incidents as they occur.
v. Strengthen Stakeholder Collaboration – streamline stakeholder management with a focus on strengthening relations and information sharing with partners as well as building increased awareness of our service offerings.
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vi. Improve Data Management – promote a data driven culture, by enhancing data stewardship, data acquisition, integration, improving data usage, increase compliance to data standards, data controls and audit, improve data completeness and accuracy and increase data governance and awareness. It also focuses on increasing knowledge and utilization of all functionalities of the existing technologies, proactive identification of Business technology needs, identification of the most viable solutions/ innovations and that technology solutions are kept up to date and integrated. All these are geared at improving operational performance.
vii. Enhance Service Quality - improve client service management and clients experience emanating from quality services (reliability, availability, suitability, accessibility, timely and user friendly services at a minimal cost).
viii. Improve Voluntary Compliance - cultivate taxpaying culture by transforming behaviours of clients from unwilling to willing, and thus register for the right taxes, file all expected returns, declare right tax amounts and pay on time.
All the above objectives when pursued well, will help the Agency Maximize Revenue i.e. increased revenue yield and improved resource optimization.
This journey is therefore envisaged to support URA move towards becoming “A transformational revenue service for Uganda’s economic independence.
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1.1 Background The URA Strategic plan has been drawn to provide Strategic direction to Senior Management and all staff of Uganda Revenue Authority on the critical areas that the organization needs to pay attention to in order to address the challenges and gaps that were identified during the situation analysis phase and thereby be able to deliver on our Mandate well. It spells out the Agency new Vision and Mission statements, the values that must define every staff, objectives to be pursued, key performance indicators and interventions to be implemented. All these are important to help staff from the top to bottom know how they fit in and are aligned to the Corporate Strategy and therefore ease Strategy execution. URA uses the Balanced Score Card (BSC) framework as the Strategic Management methodology to translate 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. Alongside the BSC, URA developed a Business Model which defines how URA is internally structured and organized to provide value to her clients. 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 mobilize revenue and creates a shared understanding in order to guide and inform strategic decisions. In summary, 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. To achieve the desired value, concerted efforts will be on making URA a data driven entity. 1.0 INTRODUCTION 1.0
9 The Journey to Cultivating a Taxpaying Culture URA CORPORATE PLAN 2020/21 - 2024/25
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 III and specifically the Domestic Revenue Mobilization Strategy. To this end, URA is focusing on improving domestic revenue mobilization in this period by cultivating a tax compliance culture.
1.2 Legal Framework for URA 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.
1.3 The National, Legal and Policy Context The primary role of URA in the Sustainable Development Goals (SDGs)) 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.
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Linkage to the Uganda Vision 2040 The Goal of Uganda Vision 2040 is “A transformed Ugandan society from a peasant to a modern and prosperous country” This involves changing from middle income to a competitive upper middle income country within 20 years. It is envisaged that the country will graduate from middle income segment 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 her 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. 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.
Linkage to National Development Plan (NDP III) The Goal of NDP III is Increased Household Income and improved quality of life which will be pursued through industrialization. Sustainable Industrialization for inclusive growth, employment and wealth creation will be the Theme of the 3rd National Strategy. Industrialization is expected to facilitate Uganda to consolidate the achievements so far realised, help address the challenges and drive the Country’s take-off and wealth creation. This will result from increased value addition to local resources, demand for agricultural commodities, jobs for unskilled and semi-skilled workers, improved trade balance through export of processed goods, among others.
The broad objectives of NDPIII are: i. Enhance value addition in Key Growth Opportunities ii. Strengthen private sector capacity to drive growth and create jobs iii. Consolidate & increase stock and quality of Productive Infrastructure iv. Increase productivity, inclusiveness and wellbeing of Population v. Strengthen the role of the State in development
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Uganda Revenue Authority contributes to the NDPIII objective five which is; “Strengthen the role of State in Development.” The Strategies and Programmes under this objective:
Objectives Strategies Programmes Strengthen the • Increase govt. participation in strategic • Governance and Security role of the State in sectors Strengthening development • Enhance partnerships with non-state • Public Sector Transformation actors for effective service delivery • Development Plan Implementation • Re-engineer Public service to promote (DPI invests. • Increase Resource Mobilization
Uganda Revenue Authority majorly contributes to two out of the six objectives of the Development Plan Implementation (DPI) Program and these are highlighted in bold. 1. Strengthen capacity for development planning; 2. Strengthen budgeting and resource mobilization; 3. Strengthen capacity for implementation to ensure a focus on results; 4. Strengthen coordination, monitoring and reporting frameworks and systems; 5. Strengthen the capacity of the national statistics system to generate data for national development; 6. Strengthen the research and evaluation function to better inform planning and plan implementation.
Aligning to the Domestic Revenue Mobilisation Strategy In 2016, Uganda developed a Medium Term Revenue Strategy whose core objective is to improve revenue collection, lifting Uganda’s tax-to GDP ratio to between 18-20% within the next five financial years. As a result, the interventions would bring Uganda closer to attaining its target of a 16% tax-to-GDP ratio as set out in the NDPII and the Charter of Fiscal Responsibility. In setting the objectives of the DRMS, the government was cognizant of the need to achieve a better balance between competing challenges: • To raise additional revenues to support the government’s Budgetary position; • To encourage a healthy flow of investment; and • To address issues of fairness and transparency in the tax system. The URA Strategy document infuses all recommended DRM interventions into its 5-year plan and raises identified interventions whose scope was narrow into a wider net so as to cover a broader based area. While monitoring activity execution, a keen eye will be maintained to ensure that all DRM interventions have been duly considered and implemented.
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1.4 Linkage between the Strategic Plan with Global and Regional initiatives Uganda is a party to the General Agreement on Tariffs and Trade (GATT) and also ratified the Marrakesh Agreement in September 1994 to become one of a founding member of the World Trade Organization (WTO). Other global commitments were Uganda is a member include; General Agreement on Trade in Services, General Agreement on Trade in Agriculture, Trade facilitation Agreement, to mention but a few. 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), SADC- EAC Tripartite and the newly created African Continental Free Trade Area (AfCFTA). 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 value . EAC products that attracted tariffs into the EC under the Cotonou Partnership Agreement are now zero1 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. 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
1.5 Process of Developing the URA Corporate Plan 2020/21 – 2024/25 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 during the Mid-term review and M&E engagements.
1 Fact sheet on the Economic Partnership Agreements, September 2014
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Secondary data was derived from review of relevant literature which included; previous researches and studies done; review of National plans i.e. NDP III, DRMS, the Programme Implementation Action Plans (PIAPs) and the MDA Strategic Guidelines 2020 etc.; independent assessments i.e. Diamond/World bank assessment, TADAT assessment by IMF, Client satisfaction Survey, among others. Statistical tables were got from URA statistical data bases, UBOS and MoFPED projections.
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2.1 Institutional Capacity of URA
TABLE 1: BUDGET ALLOCATION OVER THE PLANNING PERIOD
Budget FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 Compo- Planned Release Planned Release Planned Release Planned Release Planned Release nent Recurrent 107.132 107.132 112.131 112.131 133.964 133.964 133.964 133.964 163.26 163.26 (wage) Recurrent 84.089 84.089 109.089 109.089 176.871 176.871 180.682 180.682 231.35 231.35 (non- wage) Total Re- 191.221 191.221 221.220 221.220 310.835 310.835 314.646 314.646 394.61 394.61 current Develop- 40.50 40.50 55.662 55.662 52.64 52.64 35.57 35.57 43.64 43.64 ment External 5.84 5.84 2.181 2.181 2.29 0.00 0.00 0.00 0.00 0.00 Financing Supple- 0.00 0.00 0.00 0.00 25 25 0.00 0.00 12.70 12.70 mentary Release Total 237.561 237.561 279.063 279.063 390.76 388.47 350.216 350.216 450.96 450.96 Budget Funding 54.95 54.95 111.58 111.58 228.81 231.10 84.134 84.134 46.691 46.691 Gap (nom- inal) Funding 18.79% 18.79% 28.56% 28.56% 36.93% 37.30% 19.37% 19.37% 9.38% 9.38% Gap %) Dev’t to 19.51% 19.51% 20.78% 20.78% 20.46% 20.00% 10.16% 10.16% 9.7% 9.7% Total Bud- get (%) Note: FY 2017/18, a supplementary budget of 25Bn was received for HQT Building works, whereas eternal financing to a tune of UGX. 2.29Bn that was expected from DFID was not released.
Human Resource Development and Management The Millennials/Generation Y form the biggest part of the organization and therefore the workforce initiatives in place need to be able to meet the demands of this group to a certain extent. These are characterized as tech-savvy, family-centric, achievement oriented, team-oriented, crave attention and are prone to job-hopping. 78% of Senior Management is within the 40-49 age bracket, 54% of the middle management also falls within the same age bracket which is an indication of maturity in management to a certain extent. These are Generation X and are characterized as technologically adept, value work/life balance, individualistic and are flexible. 2.0 SITUATIONAL ANALYSIS SITUATIONAL 2.0
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URA CORPORATE PLAN 2020/21 - 2024/25
AGE DISTRIBUTION
60% 55%
50%
40%
30% 28%
20% 11% URA 10% 7% has also 0% been Percentage 20-29 30-39 40-49 50-55 growing its structure by 0.05% in 2017/18 and will grow by 0.13% by 2020/2021. With the existing trends, URAthe structure has also been is predicted growing its to structure grow by by 0.5% 0.05% by in2024/2025. 2017/18 and The will HRgrow solutions by 0.13% beingby 2020/2021. designed thereforeWith should the existing be seen trends, to address the structure the needs is predicted of the to two grow dominating by 0.5% by generations 2024/2025. i.e.The X HR and solutions Y and the soonbeing increasing designed Gen therefore Zs in the should workplace. be seen to address the needs of the two dominating generations i.e. X and Y and the soon increasing Gen Zs in the workplace. HR is theHR entry is the andentry exit and poin exitt point for employees for employees in the in the organization organization and and therefore therefore defines defines the the employeeemployee experienceexperience for the fortime the they time spend they in spend the organization. in the organization. The HR Thepractices HR practices have therefore have therefore also evolved also to adaptevolved to the to adaptchanging to the workforce changing workforce demographics. demographics. This has This seen has seenHR HRevolve evolve from from personpersonnelnel management,management, to Human to Human Resource Resource Management, Management, Talent Talent Management Management and and now now People People Management.Management. This appliesThis toapplies the mode to the of mode service of delivery,service delivery, the current the current being the being HR theShared HR SharedServices Services Model whoseModel focus iswhose on HR focus Business is on HR Partnering, Business Partnering,Centers of Centers Excellence of Excellence and HR and Service HR Service support. support. With With the implementationthe implementation of the ERP, of this the makes ERP, this the makes shared the services shared servicesmodel even model more even applicable more applicable which allowswhich HR to playallows a moreHR to strategicplay a more role strategic using the role data using from the thedata system from the as systemwell as asstaff well receiving as staff realreceiving-time real-time support through the self-service module of the system.. support through the self-service module of the system. TABLE 2: HUMAN RESOURCE CAPACITY Table 2: Human Resource Capacity Department Approved Filled Staffing % of Vacant Department ApprovedStructure Filledpositions StaffingGap % ofPositions Vacant Structure positions Gap Positions URA – URACorporate – Corporate Average Average 31783178 25742574 604604 1919.01%.01% DomesticDomestic Taxes Taxes 14101410 10291029 381381 27.02%27.02% Customs 1013 965 48 4.74% Customs 1013 965 48 4.74% Tax Investigation 153 84 69 45.10% CorporateTax InvestigationServices 337153 29584 4269 12.46%45.10% Internal CorporateAudit Services 37337 37295 042 12.46%0.00% Legal Services & Board Affairs 70 52 18 25.71% CommissionerInternal AuditGeneral’s Office 15837 11237 460 29.11%0.00% Legal Services & Board Affairs 70 52 18 25.71% 11 Commissioner General’s Office 158 112 46 29.11%
The Journey to Cultivating a Taxpaying Culture 16 URA CORPORATE PLAN 2020/21 - 2024/25
2.2 Key achievements
Achievements The Corporate Plan 2016/17 – 2019/20 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 Revenue performance, Tax to GDP ratio, Compliance management and growth in Taxpayer register. Performance in other areas is highlighted in the Corporate Scorecard.
2.2.1 Revenue performance Uganda Revenue Authority has made tremendous efforts in maximizing revenue collection during the last three years. Average revenue performance during the last 3 financial years against target was at 98.03% especially because in the fiscal year 2018/19 surplus was realized. In addition, International trade surpassed the target in two financial years 2017/18 and 2018/19 while domestic taxes surpassed the target in one financial year 2018/19. In the past 5 financial years, net URA collections have grown by 71.04%. The efficient revenue yield was driven by growth in tax register of 64.83% (585,015 against a target 300,000 tax payers) which stood at 1,487,354 tax payers by end of FY 2018/19 up from 902,339 tax payers as at the beginning of FY 2016/17. In addition, the filling outlook for VAT and PAYE is sustainable since the average filing ratio was 81.66% for PAYE and VAT which was slightly below the target of 86.92% (VAT filing was at 87.35% while PAYE filing at 75.96 % during the three-year period.
TABLE 3: REVENUE PERFORMANCE OVER THE PERIOD 2015/16 – 2018/19
FY Target (UGX Bn) Collection(UGX Bn) Growth in Revenue 2015/16 11,635.42 11,230.87 15.60% 2016/17 13,177.15 12,719.63 13.26% 2017/18 15,062.43 14,456.11 13.65% 2018/19 16,358.76 16,617.65 14.95%
Revenue performance by tax category FY2016/17 – 2019/20
FY 2016/17 FY 2017/18 FY 2018/19 FY2019/20 URA Net Actual (UGX Bn) 12,719.63 14,456.11 16,617.65 16751.64 Revenue Target (UGX Bn) 13,177.15 15,062.43 16,358.76 20,344.13 Performance 96.53% 95.97% 101.58% 82.34% Growth 13.26% 13.65% 14.95% 0.81% Gross Revenue Actual (UGX Bn) 12,894.95 14,659.76 16,958.10 17,126.41 Target (UGX Bn) 13,364.65 15,269.10 16,622.86 20,715.47 Performance 96.49% 96.01% 102.02% 82.67% Growth 12.16% 13.69% 15.68% 0.99% Domestic taxes Actual (UGX Bn) 7,480.40 8,448.92 10,074.12 10,679.82 Target (UGX Bn) 7,572.69 9,085.28 9,747.79 13,048.63 Performance 98.78% 93.00% 103.35% 81.85% Growth 13.43% 12.95% 19.24% 6.01%
17 The Journey to Cultivating a Taxpaying Culture
Table 2: Revenue Performance by tax category FY2016/17 – 2018/19 FY 2016/17 FY 2017/18 FY 2018/19
URA Net Revenue Actual (UGX Bn) 12,719.63 14,456.11 16,617.65 Target (UGX Bn) 13,177.15 15,062.43 16,358.76 Performance 96.53% 95.97% 101.58% Growth 13.26% 13.65% 14.95% Gross Revenue Actual (UGX Bn) 12,894.95 14,659.76 16,958.10
Target (UGX Bn) 13,364.65 15,269.10 16,622.86 Performance 96.49% 96.01% 102.02% Growth 12.16% 13.69% 15.68%
Domestic taxes ActualURA (UGX CORPORATE Bn) PLAN7,480.40 2020/21 - 2024/258,448.92 10,074.12 Target (UGX Bn) 7,572.69 9,085.28 9,747.79 Performance 98.78% 93.00% 103.35% FY 2016/17 FY 2017/18 FY 2018/19 FY2019/20 Growth 13.43% 12.95% 19.24% International Actual (UGX Bn) 5,414.56 6,210.84 6,883.98 6,446.60 International taxes Actual (UGX Bn) 5,414.56 6,210.84 6,883.98 taxes Target (UGXTarget Bn) (UGX Bn) 5,791.965,791.96 6,183.826,183.82 6,875.076,875.07 7,666.84 PerformancePerformance 93.48%93.48% 100.44100.44%% 100.13%100.13% 84.08% Growth Growth 11.90%11.90% 14.71%14.71% 10.84%10.84% (6.35)%
Tax TaxRefunds Refunds Actual (UGXActual Bn) (UGX Bn) (175.32)(175.32) (203.64)(203.64) (340.46)(340.46) (374.77) Expected (UGXExpected Bn) (UGX Bn) (187.50)(187.50) (206.67)(206.67) (264.10)(264.10) (371.34) NTRNTR Actual (UGXActual Bn) (UGX Bn) 458.11458.11 589.51589.51 690.96690.96 407.47 Target (UGXTarget Bn) (UGX Bn) 425.39425.39 595.66595.66 627.80627.80 651.28 Performance 107.69% 98.97% 110.06% Performance 107.69% 98.97% 110.06% 62.57% Growth -9.76% 28.68% 17.21% Growth -9.76% 28.68% 17.21% (41.03)% Source: Revenue statistics tables
Source: Revenue statistics tables
FigureFigure 2: Trend 2: analysis Trend of analysis growth in net of revenue growth from in 2015/16 net revenue to 2019/20 from 2015/16 to 2019/20
18,000.00 16.00 % 16 ,617.65 16 ,751.64 16,000.00 14.00 % 13.62 % 14 ,456.11 14.95 % 14,000.00 12 ,719.63 13.65 % 12.00 % 12.62 % 11 ,293.81 10.00 % 10,000.00 8.00 % 8,000.00 6.00 % 6,000.00 4.00 % 4,000.00 12,000.00
2,000.00 2.00 % 0.81 % - 0.00 % FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 Net Revenue Growth rate
Source: URA Databases
2.2.2 Tax to GDP ratio 9 Tax to GDP ratio has grown from 14.25% in FY 2016/17 to 15.11% in FY 2018/2019 while tax contribution to the national budget was 69.60% making a significant contribution towards self- reliance. This tax to GDP ratio however, is far below the Sub Saharan average of 18% and therefore concerted efforts are required in order to enforce and monitor all Policy Measures passed in the FY 2019/20 budget to penetrate into the informal sector which would increase the tax to GDP ratio.
TABLE 4: TAX TO GDP RATIOS FOR PAST 4 YEARS (2015/16 TO 2018/19)
FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 GDP (Current market price) 83,091 91,718 100,586 109,945 Net URA collections 11,230.87 12,719.63 14,456.11 16,617.65 Tax to GDP ratios (%) 13.83 14.25 14.33 15.11 Tax to Budget (%) 67.60 73.10 70.60 65.20
Source: UBOS and URA database
The Journey to Cultivating a Taxpaying Culture 18 URA CORPORATE PLAN 2020/21 - 2024/25
The average net revenue collections growth over the five-year period was at 15.72%. The tax to GDP ratio has increased from 12.84 % in FY 2014/15 to 15.11 % in FY 2018/19 above the NDP.2 target of 14.90%. Over the five-year period, the tax to GDP ratio increased by 2.27 percentage points and specifically, the tax to GDP ratio in FY 2018/19 has grown by 0.78% higher than the IMF target of 0.5%.
2.2.3 Compliance Management Compliance relates to conformity with tax and customs laws, regulations and guidelines and this is exhibited through registration, filling, payment and declaration. Under domestic taxes, the measure is based on; filing ratios for Value Added Tax (VAT) and Pay As You Earn (PAYE); arrears portfolio (value) as a percentage of tax revenue and proportion of arrears portfolio that are older than 12 months (value), while on the other hand, customs compliance is based on; Percentage of imports subjected to physical inspection (red lane) and arrears portfolio (value) as a percentage of tax revenue. The average filing ratio for the period (FY 2016/17 – FY 2018/19) was 81.66%, PAYE average filing ratio at 75.96% and VAT at 87.35%. This is however below the international standard average of 90.00%. Additionally, by the end of FY 2018/19 the tax register had grown by 64.83% in comparison to FY 2016/17. However, the arrears portfolio grew by 70.12% during the implementation period from UGX 2,130.68 billion as at end FY 2016/17 to UGX 3,624.81 billion as at 2018/19. This implies that despite our tax register growth more potential tax revenue is held up in the arrears due to non-compliance. The Arrears portfolio as a percentage of tax revenue is still high at (18.98%) compared to the standard of 10.00%. i. Filing ratio The filling outlook for VAT and PAYE is sustainable since the average filing ratio was 81.66% for PAYE and VAT which was slightly below the target of 86.92% (VAT filing was at 87.35% while PAYE filing at 75.96 % during the three-year period (2016/17 – 2018/19).
TABLE 5: FILING RATIOS FOR THE PERIOD FY 2016/17 – FY 2018/19
Pay As You Earn (PAYE) Target (%) FY Filing ratio Target (%) FY Filing ratio Target (%) FY Filing ratio Tax payer segments 2016/17 FY 2016/17 2017/18 FY 2017/18 2018/19 FY 2018/19 LTO 98.00 97.00 98.00 97.00 98.00 96.13 MTO 97.00 89.00 97.00 92.00 97.00 89.6 STO 75.00 64.00 75.00 57.00 75.00 62.18 PSO 70.00 59.00 70.00 53.00 70.00 55.57 PAYE Average 85.00 77.25 85.00 74.75 85.00 75.87 Value Added Tax (VAT) Target (%) FY Filing ratio Target (%) FY Filing ratio Target (%) FY Filing ratio Tax payers segments 2016/17 FY 2016/17 2017/18 FY 2017/18 2018/19 FY 2018/19 LTO 99.00 97.00 99.00 97.00 98.00 97.31 MTO 99.00 93.00 99.00 96.00 99.00 94.05 STO 75.00 82.00 75.00 79.00 75.00 84.92 PSO 84.00 77.00 80.00 74.00 84.00 76.86 VAT Average 89.25 87.25 88.25 86.50 89.00 88.29
19 The Journey to Cultivating a Taxpaying Culture URA CORPORATE PLAN 2020/21 - 2024/25
ii. Taxpayer Register The efficient revenue yield was driven by growth in tax register of 64.83% (585,015 against a target 300,000 tax payers). The tax register grew from 902,339 tax payers as at the beginning of FY 2016/17 to 1,487,354 tax payers by end of FY 2018/19. Of these new tax payers, 545,594 were individual tax payers and 39,421 tax payers were non individual as analyzed in the table below:
TABLE 6: GROWTH IN THE TAX PAYER REGISTER FY 2016/17 – FY 2018/19
Tax registration type As at end FY As at end FY As at end FY As at end FY 2018/19 2015/16 2016/17 2017/18 Non individual 72,988 86,441 102,398 112,409
Individual 829,351 943,101 1,218,293 1,374,945
Total 902,339 1,029,542 1,320,691 1,487,354
Source: URA databases
Figure 3: Performance of Taxpayers’ Register (UGX Billion) FY 2015/16 - 2018/19
1,600,000 1,400,000 1,200,000 1,000,000 Numer of Tax payers 800,000 600,000 400,000 200,000 0 FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 Number of tax payers 902,339 1,029,542 1,320,691 1487354 Increase 139,189 127,203 291,149 166663
Number of tax payers Increase
Source: URA Database
The growth in the tax register during the implementation period was boosted by the following initiatives: i. Taxpayer Register Expansion Programme (TREP) which is collaborative implementation framework through which the key government institutions responsible for business registration, that is, URA URSB, KCCA and Ministry of Local Government join efforts to register and collect taxes from businesses (mainly small and informal businesses). ii. Block Management System (BMS) which involves the region being divided into logical geographical blocks and a team of tax officers assigned to systematically manage tax compliance of each taxpayer within their block on a day-to-day basis. iii. Government directive that all their employees get Tax Identification Numbers (TINs) before their salaries are paid in IFMS caused a big growth in employee registrations. iv. Register cleaning initiatives have been carried out mainly through the compliance improvement plan.
The Journey to Cultivating a Taxpaying Culture 20 URA CORPORATE PLAN 2020/21 - 2024/25 v. Tax education initiatives that have increased public awareness. iii. Arrears Arrears are a past due debt or an unfulfilled tax obligation. Prompt detection of taxpayers failing to file tax returns and pay the tax is important to improve tax compliance. During the three years period of implementation of the corporate plan, the arrears stock grew from UGX 2,130.68 billion at end of June FY 2016/17 to UGX 3,624.81 billion as at end of June FY 2018/19 representing a 70.12% growth. In the new corporate planning period, we have to devise ways of encouraging and enforcing voluntary tax compliance in order to check on the growing arrears portfolio.
ARREARS PORTFOLIO TRENDS FOR THE PERIOD FY 2016/17 TO FY 2018/19.
Arrears Categories FY 2016/17 FY 2017/18 FY 2018/19 Growth Non-government arrears (UGX Bn) 1,828.86 2,478.45 3,427.37 87.40% Government arrears (UGX Bn) 132.15 81.39 98.04 -25.81% Total Domestic arrears (UGX Bn) 1961.01 2,559.84 3,525.40 79.77% Customs tax arrears (UGX Bn) 169.67 233.52 99.41 -41.41% Total arrears 2,130.68 2,793.36 3,624.81 70.12% Arrears Recovered 348.02 598.46 695.33 99.80%
Source: URA Databases iii. Tax Compliance Audits Managing and improving overall compliance is one of URA’s most important goals. To this effect, during the three-year implementation period several compliance interventions were taken by both Domestic tax department and Customs department to examine whether taxpayers have correctly assessed and reported their tax liability and fulfilled other tax obligations. During the three-year implementation period, Domestic Tax department conducted 45,459 tax compliance initiatives including: 3,780 audits, 11,036 return examinations, 24,208 compliance advisories, 8,303 compliance visits, 51 spot-inventory checks and 42 self-health reviews. These led to a recovery of UGX 143.96 billion. In Customs, the total number of post clearance audits completed were 902 of which 659 cases were comprehensive audits and 243 cases were issue audits.
2.2.4 Performance on Corporate Scorecard FY 2016/17 – 2019/20 The Corporate Scorecard below highlights performance in the 6 objectives over the period.
TABLE 7: PERFORMANCE PROGRESS ON CORPORATE OBJECTIVES
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Perspective. Objective Measure Target Actual Target Actual Target Actual 16/17 17/18 17/18 2018/19 2018/19 FINANCIAL Maximize Proportion of 100% 96.53% 100% 95.97% 100% 103.94% Revenue revenue collection to target. Tax administration 2.80% 2.06% 2.90% 2.11% 2.30% 1.66% costs as a percentage of revenue CLIENT Improve Position of national Rank 5 Rank 4 Rank 2 Compliance influence Compliance level 71% 80.60% 74% 68.50% 77% 68.07% Proportion of the risk based compliance 80% 70% 90% 90% 71.25% 65% programmes implemented Improve Client Satisfaction 80% 76.40% 82% 77.40% 84% quality of level service Average turnaround time (Time doesn’t 2 days 3.6 days 2 days 3.9 days 2 days 5.3 days exceed 7 days Average turnaround 27.52 time (Time exceeds 30 days 35.3 days 30 days 28 days 30 days days 7 days Optimize Proportion of Stakeholder agreed partnership 75% 85% 95% relations expectations implemented Proportion of stakeholders involved 80% 80% 85% 85% 67.50% 68% in URA interventions BUSINESS Transform Business Process Level 2 Level 3 Level 1.6 Level 3 Level 1.6 Level 3 PROCESS. URA Maturity Level Processes Number of unplanned system 12 11 12 13 9 32 downtimes Number of unplanned system 12 11 12 13 9 40 downtimes 1System meantime 3.75 11.2 3.75 34.5 2 hours 2.3 hours to recover hours hours hours hours L & INN. Improve our Staff productivity 88% 88.79% 93% 90.53% 97% 95.46% people level Staff motivation level 82% 62.20% 83% 60.70% 84% Staff integrity level 78% 78% 79% Employee stability 100% 91% 100% 94% 100%
2.3 Key Plan Implementation Challenges i. Managing Increasing tax complexity - The world is changing at a very high speed, Globalization and Digitalization have changed the way Organizations, businesses & individuals work and the Taxation landscape & ecosystems have become COMPLEX, characterized by: Volatility, Uncertainty, COMPLEXITY and Ambiguity.
The Journey to Cultivating a Taxpaying Culture 22 URA CORPORATE PLAN 2020/21 - 2024/25
ii. Increasing globalization enables multinational companies (MNCs) to execute aggressive transfer pricing strategies, e-commerce, Base Erosion and Profit Shifting (BEPS), and tax plans aimed at tax avoidance. Therefore, we need to equip enough staff with skills in auditing MNCs most especially the Telecom Sector. iii. Inadequate financing to support structural review, increase staff strength, skills and reach in critical areas e.g. Oil & Gas, Telecom Audit and Rental. iv. The need to prepare for the production of Oil and Gas activities and management of the resultant revenues. v. Many critical initiatives/projects that had to be implemented remained un funded e.g. establishing comprehensive structural review, etax 2 among others vi. Gross under declaration of rental income and therefore close monitoring through door to door field exercises, use of informers and GPS system is required. vii. The unregulated informal sector affects expansion of the revenue base (growth and expansion) viii. Changing role of Customs and regional agreements e.g. the African Continental Free Trade Area (AfCTA), increased collaboration is needed. ix. Length procurement procedures as set out by PPDA affect timely execution of interventions.
2.4 Lessons Leant Successful strategy execution requires that we recognize the following imperatives. i. All people are involved & supported for buy in & participation. ii. All systems & processes work together to eliminate fragmentation, sub optimization & competition for resources. iii. Most importantly senior leaders must lead to improve focus & credibility of the strategy. Clearer and stronger management, coordination and oversight functions are critical components. Therefore, Consistent Executive Leadership involvement, support and sponsorship is very critical. iv. Strategy execution is not about actions plans but about taking the right decisions v. Don’t measure performance by what you have accomplished but by what you should have accomplished within your capabilities and resources availed to you. vi. People don’t trust change; they need to trust you the person communicating. Communication shapes Culture. 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. vii. Make Strategy every one’s job – Increase Strategy communication & awareness to rally staff behind the Strategy. viii. Govern to make Strategy a continuous process – Budget & reporting system should be linked to Strategy Execution.
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2.5 SWOT Analysis Results 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.
STRENGTHS WEAKNESSES 1. Strong leadership and governance 1. Un-harmonized compliance enhancement strategies 2. Competent and multi skilled staff 2. Lack of a robust change management strategy 3. Competitive staff welfare schemes 3. Disintegrated processes and systems 4. Strong intelligence, science and forensics capabilities 4. Complicated tax processes and systems 5. Good Innovative capabilities 5. Inadequate succession planning and implementation 6. Robust IT processes and systems 6. Silos across the organization 7. Good capacity development programs 7. Too many initiatives and reforms at the same time 8. Young and energetic staff 8. Inflexible organization structure 9. Job security 9. Increasing staff attrition 10. Good corporate image 10. Declining staff integrity 11. Centralized headquarter service point 11. Inaccurate taxpayer data 12. Optimal resource utilization OPPORTUNITIES THREATS 1. Strong Legal framework 1. Frequent Changes in tax laws 2. Improving technology infrastructure 2. Harmful Tax Treaties 3. E-commerce, digital economy 3. Harmful Tax exemptions 4. Increasing automation of MDAs 4. Base Erosion & Profit Shifting (BEPS) 5. Adequate employable labour 5. Aggressive tax planning and complex group structures 6. Demographic dividends (A more innovative and 6. Shadow economy( Illicit economic activities, Narrow dynamic population) tax base) 7. Untapped revenue base 7. Inadequate accountability for Government revenue) 8. Organized business associations 8. Increasing Cyber Crime (ICT security risks and 9. Public good will technical threats) 10. Government interest in gender and equity issues 9. Evolving tax payer business models enabled by technological advancements (Digitalized economy - 11. Donor support E-commerce) 12. Collaboration among stakeholders 10. Existence of multiple identifiers not linked to NIN 11. Inadequate resources
2.6 PESTEL (Operating Environment) 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 environment in which Uganda Revenue Authority operates. Below are the summarized results from PESTEL analysis.
Political Environment The current strategic plan will in the early stages be implemented during a rather fragile and tense political environment, leading to, during and after the 2021 general elections. During this period, it is anticipated that there will be heightened political pressures for higher current spending, and new ad-hoc tax exemptions in addition to existing exemptions that may put downward pressure
The Journey to Cultivating a Taxpaying Culture 24 URA CORPORATE PLAN 2020/21 - 2024/25 on already constrained tax revenues. The political environment during this plan period may pose security concerns and the rising political tensions as seen from past occurrences and this could dampen investors’ confidence. On the other hand, new administrative units (districts, cities and constituencies) have been created and planned to be implemented in the phased manner till FY 2023/24. As part of the overall effort to fast track Uganda into middle income status, government approved creation of 15 cities and their operationalization is phased. Arua, Mbarara, Fort Portal and Gulu will start operations in July 2020, Hoima and Mbale will start in 2021, while Lira and Entebbe will come on board in 2022. Nakasongola, Moroto, Masaka, Soroti, Kabale and Wakiso will start operations in 2023. This will therefore require expansion in the administrative capacity of Uganda Revenue Authority to counter the emerging needs from the new political structure. Uganda has started revising and will continue to review the double taxation agreements it has with developed countries to plug tax loopholes that many corporations have been using to evade taxes. This is in response to the excessive calls by the civil society organizations pointing to evidence that many developing countries were losing money to developed countries as companies repatriate money without paying tax. At the same time a plus is envisaged from the recent government pronouncement that requires URA collect all government Non Tax Revenue (NTR) both at National and sub national level. This will be very key in improving accountability for government revenue and also go a long way in reducing the level of informality in the economy and hence enlarge the tax base. This therefore requires close collaboration and better management practices with local authorities in the whole country over the medium term. On the regional geo political perspective, Uganda continues to address the constrained political relations with one of key trading partners, Rwanda. The tense political relations have affected merchandise flow across the countries. This is further exacerbated by the other neighboring fragile states – South Sudan, DR Congo and Burundi. Operating in such a fragile environment will impact Uganda’s trade with its partners, calling for vigilant security intervention at the border to control trade and illicit flow of arms and goods. The above key development prospects may not be achieved without the necessary enabling environment. Meeting good governance principles which include: constitutional democracy; protection of human rights; rule of law; free and fair political and electoral processes; transparency and accountability; government effectiveness and regulatory quality; effective citizen participation in development processes; and peace, defense and security of the citizens and the country indicators will be important in order to create the required legal and socio-political environment to accelerate economic and social transformation upon which revenue mobilization can thrive.
Economic analysis Recent estimates from the International Monetary Fund (IMF) indicate that globally, the average GDP growth is expected to oscillate in the range of 3% to 3.4% during the Plan period. Growth in sub-Saharan Africa is projected to remain at 3.2 percent in 2019 and rise to 3.6 percent in the medium term. Growth is forecast to be slower than previously envisaged for about two-thirds of the countries in the region. Economic growth is projected to remain strong in non-resource-intensive countries such as Uganda, averaging about 6 percent. As a result, these countries will experience faster per capita income growth than the rest of the world. The prospects of sustained economic growth in the East African region remain positive, with growth projected at 6.1percent in 2020 and remain in the same
25 The Journey to Cultivating a Taxpaying Culture URA CORPORATE PLAN 2020/21 - 2024/25
range over the medium term. This is premised on better growth prospects both on the supply and demand sides of the economy. The supply side drivers being industry and services sector followed by the agricultural sector. On the demand side, consumption is anticipated to be the main driver of economic growth across East Africa. Over the medium term, the economy is projected to continue to register strong growth performance. Growth is expected to accelerate in the medium term as public infrastructure and oil investments as well as private investments begin to have a bigger impact on growth outcomes. These investments would raise the budget deficit, public debt, and the current account deficit, until oil production commences. In addition, enhancing the business environment would facilitate the envisaged private-sector growth and diversification of the economy. Economic growth is projected at 6.2 percent in the FY2019/20 and is projected to accelerate to at least 7.0 percent in the Medium Term. Inflation is expected to accelerate over the next 12-18 months mainly driven by food prices and fiscal spending, converging to Bank of Uganda’s 5 percent core inflation target. Oil production is projected to begin in 2023 and last for over 25 years. The government expects to receive about 0.5 percent to 4 percent of GDP in oil related revenue per year during this period. (Source: National Budget Framework Paper (NBFP) 2019/20 – 2023/24). The existing and other emerging challenges to the economy may hamper effective domestic revenue mobilization efforts. Key among these in Uganda is the growing informal sector (51%) which has outstripped the formal economy as per current estimates by UBOS (Rebased GDP figures 2018/19) . Another note of concern is the digital economy, despite the numerous opportunities it brings, comes with its own set of challenges, including new business models built on mobile and web-based transactions. Other emerging financial models such as crypto currencies, could pose significant financial integrity risks in the economy. This calls for heightened oversight by virtual assets service providers for Anti-Money Laundering (AML) / Countering the Financing of Terrorism (AFT) compliance. Looking at the fiscal framework over the medium term, Fiscal policy will continue to support maintenance of macroeconomic stability to support inclusive growth, employment and sustainable wealth creation. The measurable fiscal objectives over the medium term are; Achieve a 0.5 percentage point increase in the tax-to-GDP ratio per annum, Fiscal balance including grants of no greater than 3 percent of GDP by FY 2021/22 and Gross public debt in net present value terms is maintained below 50 percent of GDP. Domestic resources are projected to grow on average by 0.46 percent of GDP in the medium term. This will be supported by revenue administration measures, enhanced efficiency in tax collections as well as the implementation of the medium term Domestic Revenue Mobilization Strategy (DRMS). The projected increase in domestic revenues will lead to a rise in the percentage of the budget financed by domestic resources from the anticipated 67.9 percent during the FY 2019/20, to approximately 84.8 percent by 2023/24. Another economic aspect involves developments in Regional and Global Tax and Customs. The most recent development on the African stage is the African Continental Free Trade Agreement (AfCFTA) which aims at among other goals, to create a single market for goods and services and to facilitate movement of persons. The agreement also contemplates reforms on competition policy, investment, and intellectual property rights. Uganda became a signatory to this continental agreement in 2018 and is one of the ratifying parties. Despite the risks envisaged in regards to the reduction in customs revenue, the anticipated macroeconomic benefits this arrangement brings far supersede and these are summarized as below: i. Creating trade, with minimal trade diversion.
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ii. Enhancing growth, due to scale effects from a larger domestic market iii. Technological diffusion iv. Membership in an RTA may also reduce growth volatility due to increased market size, a clearer policy framework, and mechanisms for dispute settlement v. Increasing foreign direct investment (FDI), through the extended domestic market as well as through deep integration provisions (including those covering investment, intellectual property rights, standards, and competition policy), which lower political risks and improve the business climate. With regard to other international Treaties and Conventions, Uganda has been a member of the Global Forum on Transparency and Exchange of information on tax matters since 2010 and also a member of the Africa Tax Administration Forum (ATAF) since 2009. On Regional Trade Arrangements, specifically the Single Customs Territory, Uganda has been at the forefront of implementing the East African Community (EAC) Single Customs Territory (SCT) protocols which has proved to significantly reduce transit time to inland countries. The agreement aims, among other goals, to create a single market for goods and services and to facilitate movement of persons. The agreement also contemplates reforms on competition policy, investment, and intellectual property rights.
Social Analysis Uganda’s social environment is particularly important in determining the success of revenue mobilization efforts. The social perceptions towards tax evasion and compliance and corruption are also critical determinants of the operating environment. This calls for a society with enough skills on which modern revenue mobilization techniques and advanced technology can be applied. Uganda faces a high rate of illiteracy (6.9 million) especially for population aged 15 ages and above. Further still, about 4 percent of the population above 15 years of age has an educational attainment above the secondary school level. This indicates greater challenges of Widening the tax base and also ensuring compliance with the tax laws given the ineptness of the taxpayers to decipher tax information relayed to them. Uganda has a growing young population which presents opportunity for innovation, speed, and dexterity. Similarly, there is an emergence of a strong middle class which will play a critical role as major consumers, increase production efficiency and rebalancing the economy. With a population of close to 40 million people and high growth rates presents another opportunity to the country in terms of market of locally produced goods and services and a potential tax base for revenue mobilization. It is therefore imperative to consider that there is urgent need to continuously conduct basic tax education so that more Ugandans are made aware of taxation and business formalization in general and its use to national development. All this is because a society with a limited skills pool may limit the extent to which modern revenue mobilization techniques and advanced technology can be applied.
Technological analysis As we work towards being a fully automated organization, the digital frontier will also set the technological frontier for us. In this regard, the key technological advances that will impact how we do business include; digitalized economy, advanced data analytics and cyber-attacks. Taxing the digital economy remains one of the most problematic questions to be answered in the international tax system. Recent efforts by the International Monetary Fund (IMF) further highlight
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the magnitude of the concern. The complexities in defining the best prescription for taxing digitalized economy are exacerbated by the obscurity of on whether and how to tax businesses with a substantial digital business footprint but no physical presence in a jurisdiction — new business models that create what many countries see as a mismatch between taxation and value creation for digital activities. Undoubtedly, the digital economy and borderless Internet, while enabling operations worldwide, create loopholes in taxation and the prospects that tax bases are becoming severely eroded in the digital economy is an open secret. From the taxation and IFFs perspective, there is a growing synergy between identity-theft cybercrimes and tax fraud. Stolen identities can be used to file tax returns: such schemes involve reporting inflated amounts of income and taxes, and, therefore, claiming inflated tax refunds. Criminals can further seek to transfer these tax refunds to prepaid debit cards. The opportunities for digital transactions utilizing electronic payment intermediaries such as transfer to and from the traditional banking system, transfer between intermediaries, and peer- to-peer transactions render the eco-system more complex and opportunity for identification of suspicious transactions frail. In conventional financial institutions, most of the electronic payment intermediaries are less regulated or not regulated at all. On the data front, the existence of inadequate taxpayer databases poses a huge challenge in Uganda, due to entrenched informality. Without complete and accurate information about the taxpayers registered among government agencies, and understanding the profile of those who choose to remain outside, it is not possible to provide effective and efficient service to support voluntary compliance and to take action against noncompliance. In light of the above therefore, the Government of Uganda has identified the need to integrate National Databases to provide a standard and integrated revenue administration and business registration management system and database that will ease National planning and enlarge the tax base. This therefore calls for the need to exploit the advances related to Business Intelligence (BI) tools and machine learning potential while ensuring the data is clean and usable for timely decision making.
Environmental analysis Uganda is gifted with unique weather and climate that supports resilient ecosystems and biodiversity resulting in unrivalled advantage amongst countries world over in food production, tourism and the services sector. It is however important to note that Environment and Natural resources in Uganda are under threat and the drivers include; Poverty, Rapid population growth, Un-planned urbanization, Expansion of informal settlements, Industrialization and the impacts of climate change. Pollution levels are also on the increase and the country is contending with new and emerging environmental issues arising from e-waste, unsound use of chemicals, oil and gas development and the impacts of climate change such as droughts, floods in the Kasese, within the central business district and landslides in the eastern mountainous region that continue to have serious effects on agricultural production, food security, incomes, health status and livelihoods. These disasters may pose serious challenges to domestic revenue mobilization in the country over the medium term. There is also growing need to take into account new and emerging issues such as the e-waste as revenue administration is taking on information technology as a driver of taxpayer compliance. Going forward, e-waste will be a growing concern given the degree of dynamism in the ICT sector and level of automation of our services regarding registration, returns processing and payments. This calls for strong adherence to the existing policies to tackle the challenge of obsolescence of the ICT equipment and infrastructure. We will therefore adhere to the e-waste disposal guidelines as laid out in the environmental laws.
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Similarly, we will continue to comply with the relevant laws and regulations relating to disposal of prohibited, substandard or restricted goods as prescribed in the National Environment Management Authority (NEMA) Act. From regional perspective, we shall continue to implement the EAC Customs Management Act 2004 to ensure that prohibited and restricted goods do not enter the country as outlined in the Second and Third Schedules of the Act. Therefore, given the importance of environment and natural resources in contributing to wealth creation and employment, we shall as a matter of policy purpose to work hand in hand with other state and non-state actors to maintain and manage a sustainable environment and natural resource base that is resilient to natural and manmade threats.
Legal environment Revenue administration and mobilisation in Uganda is based on specific laws which often specify in detail the administrative procedures to be followed. This is done within the context of Uganda’s legal environment which is continuously changing notwithstanding some shortcomings. In our current context, as we strive to improve processes of revenue mobilisation and business formalization, there would be need to conduct policy and legal reviews and amendments to suit the current business environment. One of our overarching goals as an organization is to streamline revenue administration by removing unnecessary bureaucracies through creation of a single point of contact for government services as laid out in the DRMS strategy. This calls for the need to conduct a comprehensive review of all legal provisions in respective agencies geared towards addressing distortions in tax policy formulation and business regulation to reduce the size of informality in the economy. This may require urgent need to amend the existing Communications Act to provide for legal recognition of electronic records and signatures and provide for electronic commerce. These provisions will facilitate the expansion of the use of electronic means to ensure effective business registration and tax compliance given the direction as an organization we are taking in the medium term. The various tax revenue Acts that influence our operating environment will be continuously reviewed and updated during the Plan period. The main Acts include the Income Tax Act, The Excise Duty Act, The Value Added Tax Act and the EAC Customs Management Act 2004. The amendments of some provisions in the respective Acts will be done to foster a seamless adaptation and alignment to the existing legal provisions and the constitution of the Republic of Uganda.
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The high level Strategy of URA is summarized into her Mission, Vision, Core values, Strategic Themes, Overarching Strategy and Promise to Clients as indicated below.
3.1 URA Vision Statement
“A Transformational Revenue Service for Uganda’s Economic Independence”
Our dream is to fund our national budget without borrowing - that we will be able to set up infrastructure that citizens can enjoy and medical services with sufficient medical care and sufficient medical equipment.
3.2 URA Mission Statement
“Mobilise Revenue for National Development in a Transparent and Efficient Manner.” FY 2020/21 – 2024/25 FY 2020/21
While facilitating taxpayers in meeting their tax obligations, and providing revenue related information we are committed to providing a pleasant and lasting experience to our clients and stakeholders by changing what may not be going on well and developing products that meet their needs. 3.0 URA’S STRATEGIC DIRECTION DIRECTION STRATEGIC URA’S 3.0
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3.3 URA Core values
These are the norms that we cherish & uphold dearly to our hearts. - (PIP):
Patriotism – We shall be patriotic, serve our nation with pride and always have a feeling of love, devotion and sense of attachment to both our country and Agency and build alliances with other citizens who share the same sentiment.
Integrity - We shall consistently serve our clients with impeccable conduct, paying attention to rules and regulations and taking responsibility for our actions. This means living a life worth emulating where those around us yearn for our actions other than our words. We shall promote transparency, trust, honesty, reliability and consistency in all we do..
Professionalism – We shall at all times perform our roles or execute our jobs with skill, competence, ethics and courtesy. We shall try as much as possible to refrain from acting based on our social, cultural, gender, and sexual biases. We shall demonstrate respect for others and considers others as unique and of value. We shall also be agile, pursue collaborative relations and strive for excellence in whatever we do.
3.4 URA’s Goal
Our Broad Goal is ‘Promote a taxpaying culture through engaged citizenry, productive partnerships, leveraging technology, data and innovative staff” Strategic Result: Grow revenues to above 44 trillion by 2024/25
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URA’s Promise to Client:
Dear esteemed clients, We promise simplified, timely, reliable and convenient revenue services everywhere at a minimum cost to you.
Client Value Propositions
Key Concern Type Propositions Service Attributes Functionality Operate Simple business processes Easily accessible services and service points High level of transparency & accountability in service delivery 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 Relationship Equity Services driven by client focused relationship Fairness to all clients at all times Image Integrity Operate with professionalism and integrity
Perspectives The performance dimensions adopted hereunder provide for a logical flow of strategy from Organization capacity through business processes, focusing on clients/stakeholders, up to the desired results represented in the financial perspective where the organization pitches
Perspective Key Questions Key Results Financial How do we maximize mission value and effectiveness? • Financial Performance • Value & Effective Resource Use Client Through the eyes of clients and stakeholders: How well are • Satisfaction we meeting their needs? • Retention
Business How can we improve internal processes to deliver products • Efficiency process & services better, faster, and cheaper? • Quality Organizational How can we support the internal processes through • Human Capital & Culture capacity improved knowledge, skills & abilities, tools & technology, • Tools & Innovation leadership and other capacities? • Infrastructure
Strategic Themes and Results In this corporate plan we shall focus on four 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, Quality People and Engaged Citizenry.
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Themes Theme Commentary Theme result Process Widen the scope of our processes to focus on; Timely, Simplified, Accurate, Efficiency value added and cost . Process re-engineering- onboard, establish and remove non- effective execution value adding processes, automation of manual process & processes integration. . Simplifying the systems for the taxpayers. . Standardization of our processes and visibility. . Predictability of our processes. . End to end process integration of all URA Systems. . Client driven simplicity (of tools, language of laws, systems, processes, benchmark). . Harnessing emerging trends in Technology and business models that are adaptive to innovations within or outside URA . Enhance data security . Data driven strategic decisions. . Improve availability of services. . Ensure capacity of IT infrastructure. Productive Build mutual relationships that nurtures collaboration and are Increased opportunities for Partnerships beneficial to all players to help achieve our vision & Mission. business growth . Raise profile of stakeholder management, . Map and profile all URA stakeholders . Leverage influential leaders (both local and national) and institutions . Lobby for resources to third party institutions that cannot fund integration process to access data.
Quality People Strengthen & implement URAs Human Capital Dev’t Programs Motivated, innovative, such as; engaged and productive staff that deliver quality services . Integrity enhancement programs . Staff development (capacity) programs . Focused recruitments programs . Leadership enhancement programs . Structural review and functional alignment . Commit to Integrity (align to ethical leadership, engaged and resolute staff) – operationalize comprehensive integrity strategy. . Develop the desired URA staff culture. . Introduce multi-dimensional selection and recruitment assessment for the different levels. . Enhance Institutional Memory and Knowledge Retention (Intellectual Capital
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Themes Theme Commentary Theme result Engaged a) Building a corporate citizenry- in recognizing that URA has Satisfied and involved citizens Citizenry social, cultural and environmental responsibilities to the community in which it operates, as well as responsibility to her stakeholders, providing an avenue to practice responsible governance (engender integrity, ethical practices, support diversity and sustainability initiatives)
b) Strengthens the tax dialogue- Engendering & augmenting an environment that enables continuous tax dialogue with our clients and citizens and as a result nurture and graduate them to the appropriate levels (presumptive to Large) of management and facilitate compliance.
3.5 Strategy Map 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 Strategy map indicates areas of improvement that URA needs to pursue to attain the desired results.
MAXIMIZE REVENUE FINANCIAL
INCREASE VOLUNTARY COMPLIANCE
ENHANCE CLIENT SERVICE QUALITY
STRENGTHEN IMPROVE DATA STAKEHOLDER MANAGEMENT COLLABORATION
ENHANCE PROCESS MANAGEMENT
BUSINESS PROCESS
ENHANCE
ENHANCE STAFF ORGANIZATIONAL INFRASTRUCTURE CAPACITY
CAPACITY
ORGANIZATIONAL ENHANCE CORPORATE GOVERNANCE
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URA CORPORATE PLAN 2020/21 - 2024/25
3.6 Strategic Objectives and Key Intermediate Outcome Results Our Scorecard shows the areas of improvement (Objectives) that we shall pursue in order to address the Pains that were identified through environmental scanning, Stakeholder engagements, Mid-term review and review of several survey reports. It also spells out interventions that we shall implement in order to exploit our strength and opportunities (Enables) that were identified through the same process. We shall use our strength to counteract the threats. A total of 9 objectives will be pursued in this Corporate Planning period, with 6 leading objectives and 3 outcome objective. These are: Maximize Revenue, Improve Voluntary Compliance, Enhance Service Quality, Improve Data Management, Strengthen Stakeholder Collaboration, Enhance Process Management, Enhance Organizational Infrastructure, Enhance Staff Capacity and Enhance Corporate Governance.
TABLE 8: URA OBJECTIVES AND INTERMEDIATE OUTCOMES
Objective Intermediate Outcomes Indicators Baseliness Target 2018/19 2024/25 Maximize • Increased revenue • Revenue collection to target 101.6% 100% Revenue • Optimal resource use • Tax administration Cost as a % of 2.30% 2.30% revenue. Increase Improved Tax Compliance Compliance Index 64.84% 85% Voluntary level Compliance Improve Quality • Increased Client Client satisfaction level 77.40% 88% of Service Satisfaction Average turnaround time. 5.8 days 1.2 days Average IT Service availability level 98.88% 99% Improve Data • Increased Data Data management Maturity level level1 3 Management Governance & Maturity System usability rate 55.10% 70% • Optimal use of existing % data management and Technology _ 100% technologies optimization interventions executed Strengthen Strengthened relations and % of stakeholders who have delivered 60% 95% Stakeholder information sharing with value to URA (information, technical Collaboration partners support, equipment, sponsorships, platforms, funding, research etc.). % Stakeholder engagement & - 100% management interventions executed Enhance • Improve URA process Business process maturity level level 2 3 Process efficiency and ERM maturity level level 2 3 Management Governance % of risk mitigation strategies executed 30% 70% • Improved Business % of Business process improvement & risk 100% 100% Continuity management interventions executed Enhance Reduced infrastructure gap I n f r a s t r u c t u r e C a p a c i t y G a p _ 20% Organizational % of offices with customized tools of trade _ 100% Infrastructure % of Organization infrastructure capacity 100% 100% enhancement interventions executed
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Enhance Staff • Improved staff Employee Satisfaction level 74.50% 84% Capacity motivation levels Staff Attrition Rate 3.0% 2.5% • Increased level staff % Staff capacity enhancement 90% 100% expertise interventions executed % of staff trained _ 60% % staff at Mastery level _ 40% Enhance • Enhanced coordination Governance Maturity Level _ 5 Corporate between leaders & staff Staff integrity level 56.30% 80% Governance • Professional Leaders & % of governance enhancement _ 80% staff interventions executed • Cultured staff
TABLE 9: URA INTERVENTIONS AND ACTIONS
FINANCIAL PERSPECTIVE Objectives Interventions Actions Maximize Implement Revenue 1. Implement timely revenue monitoring, reconciliation and reporting Revenue Management and 2. Implement cost saving & optimization activities Resource Optimization interventions CLIENT PERSPECTIVE Improve Implement Compliance 1. Implement exchange of information activities to identify potential Voluntary Improvement tax payers, verification of information and reduce tax gap Compliance interventions 2. Implement Electronic Fiscal Devices/ E-invoicing solution and Digital tax stamps. 3. Implement activities to mobilize revenue from on-line businesses/ digital economy (Researches etc.) 4. Intensify surveillance for wider coverage of porous borders by use of Satellite technologies, Drones, speed boats, intelligence etc. 5. Develop a simplified tax regime for SMEs including the informal sector businesses to encourage compliance. 6. Undertake Tax Register cleaning. & profiling 7. Implement Risk based Audit plan using modern audit tools. 8. Undertake comprehensive risk targeting & assessment. 9. Undertake a comprehensive and proactive arrears and debt recovery drive. 10. Implement science and forensic supported investigations 11. Undertake scheme and sector/industry based investigations and intelligence
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Enhance Service Implement Service 1. Implement taxpayer appreciation activities Quality Quality Improvement 2. Review and implement Service delivery standards interventions 3. Implement effective Refunds and Duty Drawback management 4. Implement effective Objections and disputes management 5. Implement trade facilitation interventions. 6. Implement IT Service Management Framework (ITIL) 7. Implement effective Client relationship & feedback management mechanisms. 8. Implement filing and payment promotional interventions (reminder, notices etc.) 9. Develop & Implement effective Mgt of Service Level Agreements (SLAs). 10. Implement URA contact Centre. BUSINESS PROCESS PERSPECTIVE Strengthen Implement Stakeholder 1. Develop & maintain a comprehensive stakeholder inventory Stakeholder Engagement & framework (Conduct comprehensive stakeholder profiling and Collaboration Management mapping) interventions 2. Participate in the DRMS initiatives (integrated Gov’t & Partnership/ Business intelligence). 3. Implement Public Relations outreach initiatives 4. Implement Stakeholder engagements initiatives (National, Regional and Global) 5. Operationalize stakeholder management structures in every department (implement effective Mgt of MOUs) 6. Implement enriched & customized Tax payer education Improve Data Implement Data 1. Review the Data Architecture Mgt Management 2. Operationalize the Data Governance Board through Data and Technology management policy and framework. Optimization Interventions 3. Expand and enforce use of Data (Business intelligence, Advanced data analytics and reporting) 4. Expand data integration points 5. Proactively Identify user needs across different business areas and implement appropriate innovative solutions 6. Implement systems integration initiatives 7. Identify emerging industry trends & implement appropriate innovative solutions. 8. Automate and maintain the technology inventory 9. Upgrade technologies in line in with set standards and technology road map 10. Implement IT configuration management 11. Conduct value analysis of current technologies. 12. Introduce initiatives to promote use of technologies. 13. Technology consolidation
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Improve process Implement Process 1. Develop a compressive URA process inventory (well profiled, management Improvement and categorized etc.) Risk Management 2. Undertake process documentation interventions 3. Undertake process analysis and re-engineering (alignment/ integration, simplification - Registration, declaration, payment, etc.), 4. Implement Quality Management System Principles (ISO 9001 - 2015) 5. Conduct Process maturity assessment 6. Conduct comprehensive process monitoring & reviews/ audits 7. Conduct enterprise-wide research and Evaluations. 8. Develop & maintain an Enterprise risk register. 9. Undertake comprehensive intelligence gathering and research to identify enterprise risks. 10. Develop a structured process to assess, rank, and quantify enterprise risks. 11. Conduct regular monitoring of the enterprise risk management plan. 12. Operationalize the risk management committee to approve risk mitigation strategies and monitor progress with implementation. 13. Review & update a Business continuity plan. ORGANIZATIONAL CAPACITY PERSPECTIVE Enhance Staff Implement Staff 1. Review and implement the URA Total Rewards system (Social Capacity Capacity Enhancement structures, Productivity elements, Performance rewards. loyalty, interventions wellness schemes, etc.). (Training, Knowledge 2. Build and implement collaboration channels among staff sharing, Professional development, Welfare, 3. Review and Implement the staff transfer window staff engagement etc.) 4. Develop detailed competence level elements per job family 5. Undertake a comprehensive individual skills gap Analysis. 6. Develop and implement a clear career path for each staff 7. Develop a pre-qualified training service providers Database. 8. Develop and implement Curricula for different Training and Capacity Dev’t programs. 9. Undertake Competence Assessments for impact. 10. Develop & implement a systematic staff rotation & attachment system. 11. Implement Communities of Practice 12. Develop fully equipped knowledge hubs (Both physical & on-line) 13. Implement knowledge transfer mechanisms 14. Implement approved trainings & capacity development programs 15. Implement the Apprenticeship program 16. Implement coaching and mentorship program
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Enhance Implement 1. Conduct a comprehensive URA structural assessment and Organization Governance implement approved structure Infrastructure Enhancement interventions (Culture, 2. Conduct a governance assessment communication, 3. Review policy and guidelines in line with business changes Structure, Performance management, Policies, 4. Conduct compliance reviews on policies & guidelines management meetings etc.) 5. Implement transparency & accountability mechanisms 6. Review and implement sanctions for non-adherence to Policies and guidelines. 7. Publication of integrity related decisions taken 8. Implement integrity enhancement initiatives (staff investigations, sensitizations etc.) 9. Develop and Implement Leadership disciplinary mechanisms for Board appointees 10. Implement Culture promotion initiatives 11. Implement comprehensive change management initiatives.
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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 2020/21 is projected at UGX 559.116 Ie 2.4% of projected revenue collection, higher than the targeted cost of tax administration because of the required Structural review and Systems enhancements costs. From 2021/22 to 2024/25, financial resource are estimated at an average of 2.3% of the projected revenue collections.
TABLE 10: SUMMARY OF STRATEGIC PLAN BUDGET IN UGX BN
Classification FY FY FY FY FY 2020/21 2021/22 2022/23 2023/24 2024/25 Wage 247.816 298.117 308.392 308.392 308.392 Non-Wage Recurrent 267.660 330.080 387.244 444.408 501.572 Total Recurrent 515.476 628.197 695.636 752.8 809.964 Domestic Development 43.640 44.244 44.244 44.244 44.244 External Financing 0.000 0.000 0.000 0.000 0.000 Total Budget 559.116 672.441 739.88 797.044 854.208
TABLE 11: URA MTEF PROJECTIONS FOR FY 2020/21 – 2024/25 IN UGX BN
FY FY FY FY Category FY 2020/21 2021/22 2022/23 2023/24 2024/25 Wage 163.264 205.495 215.770 215.770 215.770 Non-Wage FRAMEWORK Recurrent 229.757 286.921 286.921 286.921 286.921
4.0 FINANCING 4.0 Domestic Development 43.640 44.244 44.244 44.244 44.244 External Financing 0.000 0.000 0.000 0.000 0.000 GoU Total 436.660 536.66 546.935 546.935 546.935 Total GoU + Ext. Fin 436.660 536.66 546.935 546.935 546.935 A.I.A Total 0.000 0.000 0.000 0.000 0.000 Grand Total 436.660 536.66 546.935 546.935 546.935 Funding Gap 122.455 135.781 192.945 250.109 307.273
A funding gap of UGX. 92.622Bn for FY 2020/21 is on Staff recruitment, maintenance & capacity development.
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Implementation of the Strategic plan will follow the Balanced Scorecard approach to Strategy execution, and as such each and every department will be apportioned a share of strategy depending on its mandate in the organization. This will be achieved through alignment/ Cascading of Strategic objectives and interventions. Therefore, the objectives will be broken down without losing the line of sight, contribution to strategy implementation at all levels in the Organization determined, multi-level scorecards in an organization created and each employee’s contribution to the strategy determined. This process will inform the Departmental, Divisional, Sectional, Unit and Staff scorecards that will clearly spell out the Strategic objectives contributed to, Key performance indicators, Interventions and Action to take. This will provide a basis for measuring the performance of the different levels in the organization.
TABLE 12: ROLES AND RESPONSIBILITIES OF MAJOR PLAYERS
Responsible Person Roles and Responsibilities Board of Directors • Monitoring performance of the Authority • Providing strategic guidance to Management • Determining and review of Policies • Managing the recruitment process for Senior Management Senior Management • Managing the Strategy alignment/cascading process • Agreeing and signing off performance expectations with Business units • Monitoring performance against agreed targets Board Committee on • Review of organization structure HR • Review of HR policies – selection, training, deployment, welfare schemes etc. • Managing the recruitment process Board Audit • Review of Audit reports and recommendations Committee • Considering good practice controls and procedures FOR IMPLEMENTING THE PLAN FOR Other Stakeholder – • Presiding over Tax cases logged by Clients Tax Appeal Tribunal (TAT) • Settling disputes between the Authority and Taxpayers 5.0 INSTITUTIONAL ARRANGEMENTS ARRANGEMENTS INSTITUTIONAL 5.0
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Change management is a critical phase 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 timeframes 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. 6.0 COMMUNICATION & COMMUNICATION 6.0 FEEDBACK ARRANGEMENTS ARRANGEMENTS FEEDBACK
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Sec 45(2) of the Public Finance Management Act (PFMA) requires that in exercise of the duties under this act, the Accounting officer shall in respect of all resources and transactions of a vote put in place effective systems or risk management, internal controls and internal Audit. The above responsibilities are extended to all levels of management in Uganda revenue Authority. The Enterprise Risk Management (ERM) section of RPD in the Commissioner Generals office is charged with the responsibility of coordinating and institutionalize risk management in the organization. As it’s widely acknowledged that tax administrations face numerous risks that have a potential to adversely affect revenues and or tax administration operations, management of risks is essential to effective tax administration. This involves a structured approach to identifying, assessing, prioritizing and mitigating compliance and institutional risks which will be guided by URA Risk Policy & Guidelines, good practice in risk management as stipulated by the IMF’s Tax administration diagnostic assessment tool (TADAT), and risk management principles and guide lines of ISO 31000-2009. The above will support successful implementation and the spectrum of activities will cover the five tiers of risk management; 7.0 RISK MANAGEMENT 7.0
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1 Risk Governance a) Governance structure-institute a corporate risk committee (Risk liaisons)
b) Risk committee charters- defining the roles responsibilities, and accountabilities 2 Risk Awareness a) Communication of policies, guidelines and standards &Assessment b) Sensitization of members/ risk liaisons in respect to;
ü Risk registers
ü Identification, assessment of risks 3 Risk Aggregation of risks categories by business units Quantification& Aggregation Analysis of risk events/ incidents 4 Risk Reporting & a) Multi -level risk reporting Monitoring b) Consolidation of the registers
c) Monitoring the implementation of the mitigation strategies. The level of risk will be tracked, monitored and reported on a periodical basis (Quarterly, semi-annual and annually). 5 Risk & Control Risk mitigation techniques and approaches optimization Integration of risk information into core business processes.
To ensure effective coordination of risk management activities in URA, the ERM section will be responsible for; 1) Establishment and functionality of risk committees and coordination of committee meetings 2) Developing and implementing risk awareness Programmes 3) Providing templates for the risk register, and issue logs (incident tracking template) for tracking and reporting. 4) Providing initial training to the appointed risk champions. 5) Provide risk advisory services during section, division or department meetings 6) Conduct follow ups on due/overdue action plans 7) Coordinate the risk maturity assessment for URA.
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TABLE 13: KEY ENVISAGED RISKS
No Key Risks Risk Factor/ Causes Risk Level Consequence Mitigation Strategies 1 Increasing populist activism a) Cheap popularity High o Opposing tax Lobby for Tax against policies aimed at among politicians. policies is seen accountability increasing tax collection. as a tool to gain improvement by all The information spread by b) Undermining the political capital MDAs influential people about credibility of tax especially during how high taxes are, creates accountability. the electioneering Increase sensitization and bias among the willing and c) General period. potential taxpayers. tax education to frustration and all categories to For example de- anxiety among stakeholders. campaigning efforts of the population excise duty on mobile Ensure all tax money, Deployment of policy and Digital Tax Stamps and measures are well Electronic Fiscal Reporting articulated and Information System discussed to get stakeholder buy in. 2 Tax disharmony a) Poor High o Negative Engage relevant remuneration & perception of stakeholders to Calls for tax exemption inflation pressure taxation. reverse the trend. on the pretext that negatively taxes negatively affect affecting actual Increase revenue salaries and allowances. take home of mobilization to Prosecutors are calling public servants. forestall potential to join tax exempt revenue loss. category of Judicial b) Using tax officers, Armed forces and exemption as Engage Parliamentarians. an incentive to stakeholders on industrialization use of existing tax Tax exemption as exemption & non an incentive for tax exemption industrialization, there is incentives for no scientific analysis of the industrialization. impact of tax exemptions and remission to various Review exemptions entities and their benefits regime so that to the general public. everybody pays tax. More requests for tax exemptions in reaction to the negative economic effects of COVID 19 Pandemic.
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No Key Risks Risk Factor/ Causes Risk Level Consequence Mitigation Strategies 3 Raising Public Debt a) Public High o Increasing need Increase infrastructure to fund gov’t mobilization of Public debt growth was development development revenue to service projected to grow from projects. projects. public debt among 41% to 45% in the FY other demands 2019/20, from 45% to b) Unscrupulous o Persistent need for 49.0 % in FY 2020/21 and financial foreign exchange Need for safeguard from 49.0% to 50.7 % in management stabilization. measures to FY 2021/22 as given an practices. ensure that public increase in government o Budget support debt is within projects. Since 2013, public sustainable levels. debt has increased from (Increased dialogue 12% to the current 41% of with MOF) GDP. The reducing economic growth will certainly make public debt unsustainable. Expenditure on interest payment of the public debt far exceeds government expenditure in key sectors of the economy such as health and education. 4 Civil Order Disruption. Highly contagious High o No specific Design and rollout virus and related medical more robust online (Lockdowns, curfew, travel containment treatment. services. bans, quarantines, How measures. long pandemic lasts is o Curfew on, Critically analysis guess work, (resurgence & of e-data for Extensions of lockdowns). o Entertainment possible tax industry with assessments Effects of COVID-19 limited operations are being felt globally, including bars not Investment in government revenues operational. intelligence have dropped, deficits especially for o Unemployment excisable goods. have increased and debt likely to increase. levels have swelled to Contingency plans eye-watering proportions. o Great fear of to counter the The service sector that resurgence and or uncertain outlook contributed 69% revenue different strains. and possible in FY 2018/19 has been budget cuts. worst hit. Notably of which is tourism, hospitality, Check illicit transport, entertainment, trade and undue oil and gas industries. profiteering.
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No Key Risks Risk Factor/ Causes Risk Level Consequence Mitigation Strategies 5 Recurrent changes in Great speeds at High a) Constraining 1) Continuous technology and business innovation and of resources to capacity building models. invention of business enable coping up for staff to meet solutions and with the changes. new developments The global business applications. in the tradecraft landscape is fast changing b) Offering of in terms of structures, services with 2) Retooling the business models, obsolete tools different functions communication platforms of trade affect especially with and modes, transaction/ reputation. core technology alternative payment driven roles. methods have evolved and/ 3) Continuous or emerged. This exposes research and the tax administrations to reviews in the area newer, more sophisticated of e-commerce. forms of tax crime, evasion and related frauds. These 4) Continuous render the traditional tools learning and of trade, competencies and development procedures ineffective. protocols. 6 Taxes unduly held up in the • Transfer of Judges High a) Delayed decision 1) Continued judicial system as a normal making in engagement with routine. adjudication of judicial officers to • Judicial officers are cases since judges create a workable transferred quite often • Case backlog are frequently relationship. to various stations and worsened by the transferred. they are therefore COVID pandemic, 2) Increase budget not in position to among other b) Increased budget support to expose conclude cases partly factors allocation to cater judges to taxation handled. Tax matters extensive training matters. are technical and can • Appeals & of new judges in only be appreciated taxation. 3) Create an internal objections not dispute settlement after a given time of judiciously & experience. c) Delayed collection mechanism similar timely handled. of revenues in to a tribunal. • Case backlog, resulting court system from manpower 4) Develop & shortages and limited d) Negatively implement facilitation among impacting on robust out of other challenges in the organizational court settlement judicial system. reputation mechanisms. • Justice delayed is 5) Judiciously justice denied, there determine appeals is a greater likely hood and objections. or risk of judgments being rendered unenforceable due to entities winding up or closing shop before enforcement.
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No Key Risks Risk Factor/ Causes Risk Level Consequence Mitigation Strategies 7 Obsolete systems, tools Insufficient resources High a) Inability to 1) Conduct an expert and equipment. for sustainability. conduct real time assessment for image analysis the current level URA’s main tools/ of efficiency, applications used in tax effectiveness an administration i.e. e-TAX, b) Inadequate integration of ASYCUDA world have systems. lived past their useful service delivery life beyond the time for undermines tax 2) Explore possibilities support services from the compliance thus of having an inbuilt providers. Whereas there delayed revenue tax administration is considerable efforts collection. system for the EAC towards renewing these, region. they are still in use and overstretched. c) Inability to access Services The consistent breakdown negatively affects of scanner equipment URA’s reputation. interrupts the submission of images from the scanner site to the Central Command Centre. Failure of systems including perimeter firewalls, applications, load balancers, network devices/links, databases, storage, power, cooling etc. lead to service interruptions. 8 Geopolitical Risks Greedy and Bankrupt Medium Trade flow Intensify domestic tax leaders between revenue mobilization. The geopolitical tensions partner remain elevated both at states is national and international affect and levels. Dynamic trends in consequently the global politics results results into into an increasing fractured Revenue political environment that loss and generates new sources increased of conflicts which has trade deficit. a significant impact on consumer and business Political confidence where investors campaigns and consumers hold affect back on spending, which compliance could reduce aggregate efforts demand further, thereby constraining international commodity prices and economic activity, with adverse implications for exports.
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No Key Risks Risk Factor/ Causes Risk Level Consequence Mitigation Strategies 9 Limited infrastructure Lack of tools or High Insufficient 1) Explore possibilities capacity for real time gear to monitor the collections from for equipment monitoring of the telecom telecommunication the telecom or infrastructure industry players. URA is at sector. sector for real time the mercy of the telecomm monitoring of the companies. Their returns sector. may not be appropriately questioned 2) Work out modalities to access or have viewing rights to their systems. 10 Limitations of physical 1) Inadequate High a) Public remains 1) Source for more taxpayer education resources yarning for funding. programs. tax related 2) Schedule obligations. 2) Coordinated To enhance tax compliance, constraints and strategic media there is need for a prioritization. b) Non-realization buying plan. knowledgeable taxpayer. of a taxpaying Tax related information can 3) Unfavourable culture. 3) Alternative modes be conveyed among others competition for of training other through media, outreach media space c) Increased costs than physical programs, educational with other of tax education training for schools institutions. Resource running national via expensive and tertiary constraints have impeded programs. enforcement institutions content development and activities. distribution initiatives. Reducing dissemination of tax information and undermining tax compliance.
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“What gets measured gets done” and “What cannot be measured, can’t be managed.” Uganda Revenue Authority will adopt result based management that will be incorporated in to the monitoring and evaluation spectrum of the implementation of the corporate plan and all associated projects. The8 MONITORING focus will be AND put EVALUATION on achieving FRAMEWORK outcomes and impact rather than
activities"What gets and measured inputs. gets This done” will and be “What achieved cannot through be measured, strong can't organizational be managed." leadership supporting a learning culture (organizational capacity) Uganda revenue Authority will adopt result based management that will be incorporated in to the whichmonitoring values and evaluation evidence spectrum based of the implementationinformation of theand corporate openness. plan and allThe associated result chainprojects. below The focus is willan beiterative put on achieving process, outcomes the planningand impact rather starts than with activities a clear and inputs. view This will be achieved through strong organizational leadership supporting a learning culture of(organizational the organization capacity) which direction/ values evidence intended based information outcomes and openness. and when The result carrying chain outbelow monitoring is an iterative process,and evaluation, the planning starts the withplan a clearis kept view ofin the focus organization on high direction/ level intended outcomes and when carrying out monitoring and evaluation, the plan is kept in focus on objectives/outcomes.high level objectives/outcomes.
FigureFigure 4: 4 :Results Results Chain Chain
Planning for Results Managing for Results
Inputs Activities Out puts Outcomes Impact
Delivery Results
In order to improve Corporate Accountability and enhance institutional efficiencies, continuous Inmonitoring order toof URAimprove strategy Corporate shall be conducted Accountability to assess strategy andexecution enhance and its relevance institutional to the efficiencies,achievement of the continuous planned results monitoring and outcomes. of URA strategy shall be conducted toThe assess URA monitoring strategy and executionevaluation framework and its is basedrelevance on the resultto the value achievement chain from inputs, of theprocesses, planned outputs results and outcomes 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. TheThe monitoringURA monitoring of this corporate and planevaluation will be coordinated framework as a corporate is based function on the under result the valueCorporate chain Performance from inputs,Reporting ,processes, M&E section in outputsthe Research, and Planning outcomes & Development under division each perspectivein Commissioner thatGeneral’s collectively office. deliver the intended strategic objectives.
TheTo ensure framework effective coordination will also of theprovide M&E framework a clear within basis the Authority,for monitoring the Corporate the contributionsPerformance Reporting, of Monitoringthe various & Evaluation strategic section willmeasures be responsible that for: are linked to strategic• Providing objectives. 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 Theframework. monitoring of this corporate plan will be coordinated as a corporate function• Carrying underout periodic the visits Corporate to projects andPerformance Business areas to Reporting, ensure reported M&E implementation section conforms to facts on the ground. in• theCo-ordinate Research, meetings Planning to review progress & Development and resolve issues thatdivision may arise in in theCommissioner implementation. General’s• Provide relevantoffice. reports with recommendations to senior management to ensure that management is fully updated on the plan implementation. To ensure effective coordination of the M&E framework within the Authority, the Corporate Performance Reporting, Monitoring & 41 Evaluation section will be responsible for: • Providing a framework, including standardized templates, for reporting on a quarterly, semiannual and annual basis.
8.0 MONITORING AND MONITORING 8.0 • 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. EVALUATION FRAMEWORK FRAMEWORK EVALUATION • Co-ordinate meetings to review progress and resolve issues that
50 URA CORPORATE PLAN 2020/21 - 2024/25
may arise in the implementation. • Provide relevant reports with recommendations to senior management to ensure that management is fully updated on the plan implementation. The Plan identifies a set of Key Measures below to be monitored.
Strategic Measures Baseline Targets objectives 18/19 20/21 21/22 22/23 23/24 24/25 Initiatives FINANCIAL PERSPECTIVE Maximize Revenue collection to 101.6% 100% 100% 100% 100% 100% Implement Revenue target revenue DT Revenue collection to 100% 100% 100% 100% 100% management DT Target and resource optimization Customs Revenue 100% 100% 100% 100% 100% interventions collection to target Revenue collected from 80Bn 80Bn 82Bn 84Bn 85Bn Debt Tax administration Cost as 2.3% 2.3% 2.3% 2.3% 2.3% a % of revenue. Budget absorption level 100% 100% 100% 100% 100% % of Resource optimization 100% 100% 100% 100% 100% interventions executed CLIENTS PERSPECTIVE Improve Compliance Index 64.84% 80% 82% 83% 84% 85% Implement Voluntary % of arrears portfolio to 21.81% 18% 15% 12% 10% 10% compliance Compliance Revenue collected improvement interventions % of collectable arrears 6.57% 6.0% 5.5% 5.0% 5.0% 5.0% portfolio to Revenue collected % of arrears portfolio older 76.89% 55% 45% 35% 25% 25% than 12 months to total arrears Average on-time filing Average is 70% 75% 80% 85% 90% ratio for all core tax heads- 63.34% (VAT, Income tax, PAYE, LED-84.1% WHT &LED ) PAYE-72.I8% VAT-80.5% IT -14.7% WHT-64.6% Average on-time payment for the period 75% 80% 85% 90% 95% rate for core tax heads July-sept 19/20 the Average is 62.42%.
LED-67.94% PAYE-54.85% VAT-52.94% WHT-73.95% % of declarations granted 5.39% 5% 4.5% 4% 3.5% 3% top ups % growth in tax register 12.62% 15% 15% 15% 15% 15% Success rate/convictions 84.09% 75% 75% 75% 75% 75% in court
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Enhance Client satisfaction level 77.40% 80% 82% 84% 86% 88% Implement Service Average turnaround time 5.8Days 4 days 3 days 2 days 1.2 1.2 service quality Quality (% of services delivered days days improvement within stipulated timelines interventions - 100%) Average IT Service 98.99 99% 99% 99% 99% 99% availability level Mean time to recover. 2.3 hours 2.1 2.1 2.1 2.1 2.1 hours hours hours hours hours a. Network (WAN & LAN, perimeter): 2 hours b. Power: 2 hours c. Applications – etax: 2 hours, ASYCUDA: 2 hours, ERP: 2 hours, ehub: 4 hours, mail: 2 hours, payment platform: 2 hours d. Database: 2 hours e. Server infrastructure: 1 Hr % of service quality 100% 100% 100% 100% 100% improvement interventions executed % of administrative 87.42% 100% 100% 100% 100% 100% reviews (objections, disputes) completed within statutory deadlines. % of tax refund claims/ _ 90% 90% 90% 90% 90% duty draw backs processed within statutory deadlines BUSINESS PROCESS PERSPECTIVE Improve Data Data management Level 1 2 2 3 3 3 Implement data Management Maturity level Management System usability rate 55.10% 55.5% 60% 65% 65% 70% and technology optimization % data management and 100% 100% 100% 100% 100% Interventions technology optimization interventions executed Strengthen % of stakeholders who 60% 65% 70% 80% 90% 95% Implement Stakeholder have delivered value stakeholder Collaboration to URA (information, engagement and technical support, management equipment, sponsorships, interventions platforms, funding, research etc). % Stakeholder engagement 100% 100% 100% 100% 100% & management interventions executed
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Improve Business process maturity level 2 2 3 Implement process level process management ERM Maturity level 50% 60% 70% 80% 90% improvement & risk Management % of risk mitigation 30% 40% 50% 60% 70% Interventions strategies executed (documentation, % of Business process 100% 100% 100% 100% 100% reviews, risk improvement & risk registers, etc.) management interventions executed ORGANIZATIONAL CAPACITY PERSPECTIVE Enhance Infrastructure Capacity _ 40% 35% 30% 25% 20% Implement Organization Gap organization Infrastructure % of offices with _ 60% 70% 80% 90% 100% infrastructure customized tools of trade capacity enhancement % of Organization 100% 100% 100% 100% 100% interventions infrastructure capacity enhancement interventions executed Enhance Staff Employee satisfaction level 74.5% 76% 78% 80% 82% 84% Implement Capacity Staff attrition rate 3.0% 2.5% 2.5% 2.5% 2.5% 2.5% staff capacity enhancement % Staff capacity 100% 100% 100% 100% 100% interventions development interventions (Training, executed knowledge % of staff trained _ 60% 60% 60% 60% 60% sharing, % of staff at Mastery level 20% 40% professional Dev’t, welfare, staff engagement etc.)
Enhance Governance Maturity Level _ 3 3 3 4 5 Implement Corporate Governance Governance Enhancement Staff Integrity Level 56.3% 60% 65% 70% 75% 80% interventions (Culture, communication, % of governance _ 100% 100% 100% 100% 100% structure, enhancement intervention performance executed management, policies, management meetings etc.)
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Uganda Revenue Authority has five broad categories of capital items that she normally spends on in execution of her mandate. These are: Buildings, Machinery and Equipment, Furniture and Fittings, Transport Equipment and ICT Equipment. The projected expenditure on these capital items has been determined based on previous allocations, office requirements and MTEF Resource Envelop projections for URA. URA has a total of seventy-Eight (78) operational offices across the country. These include the 22 storied URA Tower and Six (6) One Stop Border Posts (OSBPs) at Malaba, Busia, Mirama Hills, Mutukula, Elegu and Katuna. There are also eleven (11) additional newly opened Customs stations at Namayingo, Awenolowi, Madiopei, Ngomoromo, Kakunyu, Butiaba, Nsonga, Kaiso, Ntuura, Butogota, and Busanza. All these require substancial amounts to be equipped with the requisite infrastructure, tools and ICT equipment. However, the amounts appropriated to retooling from MTEF is not enough to provide all the basic infrastructure The table below shows the approved (FY 2020/21 – 2021/22) and projected allocation to capital items as per MTEF.
Projected Capital Expenditure in UGX. Bn Capital Item 2020/21 2021/22 2022/23 2023/24 2024/25 Non-Residential 2.600 Buildings 7.600 7.600 7.600 7.600 Machinery & 0.250 Equipment 0.050 0.050 0.050 0.050 Furniture & Fittings 0.050 0.654 0.654 0.654 0.654 Transport Equipment 8.022 8.022 8.022 8.022 8.022 ICT Equipment 32.714 27.917 27.917 27.917 27.917 Total Projected Capital Expenditure 43.636 44.244 44.244 44.244 44.244 URA RE-TOOLING 9.0 PROJECT PROFILES – PROFILES PROJECT 9.0
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Revenue collections are projected to grow from UGX 16.75 Trillion in FY 2019/20 to UGX 44.35 Trillion in FY 2024/25 representing about 165% growth in revenue over the period (Additional UGX. 27.60 Trillion). Below are the underlying Assumptions for Projections:
i. Real GDP growth is estimated to range between 6.2% - 7% over the period. With this, we estimate that by the end of the corporate plan period, the tax to GDP ratio will be 18%.
ii. As we implement the DRMS, it is projected that domestic taxes contributions to total revenue will increase to 80% by the end of the planning period.
iii. Number of tax payers required to raise the needed revenue from the different tax heads has been estimated basing on the assumption that Tax revenue depends on number of active taxpayers. The tax register is expected to grow from about 1.2 million as at the end FY 2019/2020 to over 4 million by end of FY 2024/2025.
TABLE 14: URA REVENUE COLLECTION FORECASTS (UGX BILLION)
Net Revenue Collections in UGX Bn. FY FY FY FY FY FY 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 (Actual) Total Net 16,752 21,927 26,193 31,295 37,381 44,351 Revenue Nominal 136,209 158,775 178,350 200,667 225,883 253,117 GDP at Market Prices Tax to GDP 12.30% 14% 15% 16% 17% 18% Ratio Source: NDP111 & URA RPD Revenue Modelling Section
FY 2020/21-2024/25 10.0 REVENUE PROJECTIONS REVENUE PROJECTIONS 10.0
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“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 2020/21 – 2024/25 puts forward robust Strategies and initiatives to be implemented in order to promote a taxpaying culture among all Ugandan that will enable the country to attain 16% Tax to GDP by 2025. The plan lays down strategies that will be implemented to improve our people, processes, stakeholder and client relations. The plan spells out the aspirations of our clients and all stakeholders, which we are committed to addressing. The Goal of NDP III is Increased Household Income and improved quality of life which will be pursued through industrialization. URA’s corporate plan is therefore aligned to finance NDP III’s objectives and to reduce Donor dependency. This therefore requires heightened efforts in domestic resource mobilization. The Strategy management, 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, section up to individual staff will be required to pick their portion of the organization’s strategy based on their mandate in order to support achievement of the desired URA outcomes. Clear performance expectations will be drawn and agreed on with respective functional heads and these will inform the M&E and Performance Management areas. 11.0 CONCLUSION 11.0
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Success is not a destination, it’s a journey, let us walk this journey together.
57 The Journey to Cultivating a Taxpaying Culture URA CORPORATE PLAN 2020/21 - 2024/25 12. ANNEXES
12.1 URA Results Framework, Outcome Level
S/N Objective Outcome - URA Baseline 5 Year FY FY FY22/23 FY FY Measure (18/19) Target 20/21 21/22 23/24 24/25 FINANCIAL PERSPECTIVE 1 Maximize Revenue collection to 101.6% 100% 100% 100% 100% 100% 100% Revenue target
Tax administration 2.07% 2.30% 2.30% 2.30% 2.30% 2.30% 2.30% Cost as a % of revenue. CLIENT PERSPECTIVE 2 Improve Compliance Index 64.84% 85.0% 80.0% 82.0% 83.0% 84.0% 85.0% Voluntary % growth in value 12.62% 15% 15% 15% 15% 15% 15% Compliance clients’ register 3 Enhance Service Client Satisfaction 77.40% 88% 80% 82% 84% 86% 88% Quality level Average turnaround 5.8 days 1.2 days 4 days 3 days 2 days 1.2 1.2 time days days BUSINESS PROCESS PERSPECTIVE 4 Improve Data Data management Level 1 Level 3 Level 2 Level 2 Level 3 Level 3 Level Management Maturity level 3
System usability rate 55.10% 70% 55.5% 60% 65% 65% 70% 5 Strengthen % of stakeholders 60% 95% 65% 70% 80% 90% 95% Stakeholder who have delivered Collaboration value to URA (information, technical support, equipment, sponsorships, platforms, funding, research etc). 6 Improve Process Business process Level 2 Level 3 Level 2 Level 2 Level 3 Level Level Management maturity level 3 3 ERM maturity level Level 2 Level 3 Level 2 Level 2 Level 3 Level 3 Level 3 ORGANISATIONAL CAPACITY 7 Enhance Staff Employee Satisfaction 74.50% 84% 76% 78% 80% 82% 84% Capacity level Employee Stability 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% Rate % staff at Mastery _ 40% 20% 25% 30% 35% 40% level %of staff exceeding _ 25% 5% 10% 15% 20% 25% performance expectation 8 Enhance Infrastructure - 20% 40% 35% 30% 25% 20% Organizational C a p a c i t y G a p Infrastructure % of offices with - 100% 60% 70% 80% 90% 100% customized tools of trade
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S/N Objective Outcome - URA Baseline 5 Year FY FY FY22/23 FY FY Measure (18/19) Target 20/21 21/22 23/24 24/25 9 Enhance Governance Maturity 5 Level 5 3 3 3 4 5 Corporate Level Governance Staff integrity level 56.30% 80% 60% 65% 70% 75% 80% Leadership _ 80% 60% 65% 70% 75% 80% Effectiveness Score
12.2 NDP 111 - URA. Programme Implementation Action Plans
Programme Sub Programme Program Intervention(s) Output Results Output Indicators
Manufacturing Industrial and 3.5 Establish 4 border Increased exports Proportion of agreed Technology markets to facilitate trade to targeted partnership expectations/ Development with regional neighbors neighbouring actions implemented (especially at the South markets as per MOUs/written Sudan and Congo borders) commitment Average Time Goods Clearance (Exports) Proportion of stakeholder groups involved in Customs interventions (revenue & non-revenue related) Institutional 4.1 Enact and enforce the Local content % of the processes that are Coordination local content law law enacted and re-engineered enforced 4.2 Enforce the laws on Anti-counterfeits and Proportion of agreed counterfeits and poor- quality product laws partnership expectations/ quality products enforced actions implemented as per MOUs/written commitment % of DRMS Initiatives implemented 4.3 Change the tax regime Tax Regime reviewed Proportion of LSBA to attract more investors in process improvement manufacturing; upstream interventions executed parts of the value chains
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Sustainable Transmission and 1.9- Review the existing Electricity Act, 2000 Proportion of business Energy Distribution Acts (Electricity Act, process management Development 1999 and Atomic Energy initiatives developed Act, 2008) and develop Implement Business legislation for geothermal Process improvement to promote exploration, programs development and utilization of Uganda’s geothermal resources for social and economic transformation and energy efficiency Sub 1: 1.3 Reform and improve Integrated revenue No. of LGs empowered Urbanization and business processes in cities management & on the use of integrated Physical Planning and urban areas to facilitate administration revenue management & private sector development system deployed administration system, expand TREP activities to cover every municipality and retool with Private Sector Enabling 1.1: Increase access to 1.1.3.Security % of EOI requests Development Environment affordable credit largely Interest in Movable completed within the targeting MSMEs Property Registry Stipulated International System fully standards functional and accepted by the industry 1.4: Address non-financial 1.4.1.Warehouse Proportion of Customs factors (power, transport, receipt system Warehouse connected to business processes etc.) strengthened the online system leading to high costs of Proportion of warehouses doing business complying with URA controls 1.4.2.Private firm Proportion of private firms transacting using ICT transacting using EFRIS increased and Digital Tax Stamps (DTS)
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Private Sector Strengthening 2.1: improve management 2.1.3.Industry Proportion of members Development Private Sector capacities of local associations and of trade unions in the tax Institutional and enterprises through clusters (chambers of register Organizational massive provision of commerce and trade Capacity business development unions) strengthened services geared towards 2.1.3.Industry Number of tax education improving firm capabilities associations and programs implemented clusters (chambers of commerce and trade unions) strengthened 2.1.4.Measures No. of additional local undertaken to create firms that are accredited national, regional and to Authorized Economic global business links Operators (AEOs) for registered local enterprises 2.1.5.Measures Number of transactions undertaken to under the Electronic single increase the window automation of business processes 2.1.6.Established a A unique identifier for all unique identifier for businesses across agencies all businesses across established agencies 2.1.7.National E-commerce transaction E-Commerce register platform for Ugandan No of tax payers in the products and services E-Commerce Tax payer established register Enabling 5.2 Rationalize and 5.2.1.Institutional No. of seizures and Environment harmonize standards and policy destruction of substandard institutions, and policies at frameworks for good (Metric Tonnes) local and regional level investment and trade harmonized 5.3 Review the legal and 5.3.1.Legal No. of incentives for regulatory frameworks and regulatory formalization in place to remove restrictive frameworks legislation and fast track reviewed to remove pending bills and incentivize restrictions and the formalization of Bzs provide incentives for formalization
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Public Sector 3. Human 3.1 Undertake nurturing Approved tax Proportion of the Training Transformation Resource of civil servants through administration Plan implemented. Management patriotic and long-term capacity national service training enhancement programs implemented Strengthening 5.3 Improve access A comprehensive A comprehensive Data Accountability to timely, accurate and data management Management Program in comprehensible public program developed place information (a Develop and implemented a common public data/ Increased number of Number of authentic key information sharing authentic key data data sources integrated platform) sources integrated with URA Data Warehouse with URA data warehouse Domestic Revenue Percentage increase in Mobilisation Strategy taxpayer register Implemented Governance and Strengthen Establish and operationalize National service Proportion of URA staff Security the capacity of a National Service Program program established participating in the security agencies and operationalized. National service college to address Strengthen identification Strengthen % increase in tax register emerging and registration of persons’ Institutional Capacity security threats services of NIRA to deliver Identification Service Strengthen Strengthen border control Border conflicts Number of scanners border policing and security resolved procured Strengthen Simplify, translate and Establish and equip No. of laws, policies and policy, legal, disseminate laws, policies additional canine, standards simplified regulatory and and standards Traffic, marine and Proportion of Legal institutional fire stations Opinions issued viz frameworks instructions received for effective governance and security Strengthen Strengthen family justice Functional legal aid No of technical support people centered clinics established engagements delivery of security, justice, law and order services Strengthen Strengthen response to Use of scientific No. of cases handled using the capacity of crime evidence in crime scientific evidence security agencies management No. of key modern to address strengthened scientific equipment emerging acquired for forensic security threats analysis DGAL Laboratories International Accredited
Monitoring of Government Client Charter No. of institutions where Programs for effective feedback performance assessment service delivery mechanisms on the Client Charters are reviewed and institutionalized. strengthened
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Development 6.5 Promote the use of Big data analysis Number of URA staff Plan big data analysis techniques techniques trained in big data analysis Implementation Strengthen in Audit and Investigations incorporated in Audit the research and Investigations and evaluation promoted function to 6.7 Build research and Research and Number of research better inform evaluation capacity Evaluation Capacity papers on key emerging planning to inform planning, in taxation built. issues in taxation and plan implementation as well as implementation monitoring and evaluation; Strengthen 2.1. Fast track the Integrated Integrated government tax budgeting implementation of the government tax system in place and resource integrated identification system mobilization solution linking taxation and Tax Payer No of tax payer service delivery (e-citizen) engagements and engagements undertaken consultations with private sector associations undertaken for improved compliance Tax compliance Tax Payer education improved through strategy increased efficiency Functional Data Analysis in revenue function/unit within URA administration Risk management strategy disseminated Assessment report on cost benefit analysis on possibility of outsourcing some compliance Timely assessment report on efficacy and integration of IT systems Development Strengthen 2.1. Fast track the Tax compliance No of integrity Plan budgeting implementation of the improved through promotional campaigns Implementation and resource integrated identification increased efficiency conducted mobilization solution linking taxation and in revenue service delivery (e-citizen) administration 2.4 Deepening the Tax Registration % growth in amount of reduction of informality expansion NTR collected and streamlining taxation programme fast % growth in Tax revenue at national and local tracked government levels Domestic tax Revenues collected.( Billion shs) Non-Tax Revenue collected (Billions Shs) 2.5. Implement electronic Electronic tax % of LGs with e-tax system tax systems to improve systems at National (Interface with e-LogRev) compliance both at and LG levels. i.e. A functional & integrated National and LG levels. E-invoicing ,e- LogRev e-tax system at the and Digital stamps National and LG level Proportion of assessments are automated ( human interface )
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12.3 Domestic Revenue Mobilization Strategy Road Map
No Proposed Intervention Timing lines 2020/21 2021/22 2022/23 2023/24 2024/25
Seizing opportunities and tackling inefficiencies A Governance Review the URA structure and consider reorganization to 1 promote integration Expand the range of measures for assessing URA’s 2 performance to reduce reliance on collection targets Strengthen the oversight function of the URA Board and 3 the Minister. Separate Internal Audit and Staff Compliance functions to enhance dedicated attention given to corruption and 4 staff integrity issues Establish a separate Taxpayers’ Ombudsman to 5 investigate service-related complaints B Lifting the Human Resource Capacity at URA Conduct an independent staffing review to pinpoint critical gaps on skills, staffing levels, and workload 6 analysis Implement a comprehensive training strategy to up-skill URA staff, including new joiners, and develop a URA tax 7 training academy Review the URA performance management and reward 8 system to improve growth opportunities for staff C Data Management and Analytics Prioritize a data quality improvement strategy and 9 develop processes to maintain data quality 10 Empower URA to access relevant third-party data Develop a cross-government policy framework for data 11 sharing and management Create a formal data skills development plan, including 12 preparedness for disruptive technologies Information, Communication, and Technology D Infrastructure 13 Design and implement a medium-term ICT strategy Review options available and based on a proper assessment of costs, benefits, and needs, upgrade or 14 invest in a new eTax system Support the Standardization of key government systems 15 to improve integration Improving the Compliance Continuum E Taxpayer registration Regularly detect and de-register inactive taxpayers to 16 cleanse the taxpayer register Expand the use of the biometric National ID for 17 registration Improve URA access to external data to identify potential 18 taxpayers Adopt a simple and fully-online registration system for 19 those with internet access
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No Proposed Intervention Timing lines 2020/21 2021/22 2022/23 2023/24 2024/25 Enforce registration as a qualifying requirement for 20 professions and key trades Promote political messaging supportive of a “civic duty 21 to register” F Taxpayer Education, Services, and Communication Develop and test a taxpayer engagement strategy 22 premised on research and survey analysis Produce clear, comprehensive, and easy-to-navigate tax 23 guides for taxpayers Make online services and the URA contact center more 24 user-friendly and intuitive Regularly conduct taxpayer perception surveys and use 25 them to drive changes in administration strategies G Timely and Accurate Filing Introduce measures to strengthen the effectiveness of 26 self-assessment Adopt monitoring of inaccurate reporting as part of 27 URA’s routine work Work more closely with relevant regulators to improve 28 filing compliance Address infrastructure constraints by offering points for 29 connection across the country H Timely Payment Prioritize strategies to reverse the current arrears and 30 audit trends Investigate options for enhancing the use of electronic 31 payment methods, including mobile money 32 Streamline tax debt collection and improve transparency Prepare management reports on a regular basis to allow 33 for better-informed tax collection policies I Audit Consider the adoption of real-time digital sales and 34 production monitoring systems Strengthen URA’s audit function by adopting modern audit tools, enhancing the use of risk-targeting, and 35 increasing the number of “mass audits” Bring the entire audit and payment process online, 36 allowing for improved oversight Promote audit process integration across taxpayer offices 37 at URA Include reports on audit activities and outcomes as an 38 integral aspect of reports to MFPED J Investigations & Enforcement Prioritize information from internal risk assessment 39 indicators when initiating cases Implement the Automatic Exchange of Information and 40 common reporting standards for tax purposes Enhance resources to equip scientific laboratories and 41 investigations personnel Intensify penalties for non-compliance and increase the 42 number of tax investigations
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No Proposed Intervention Timing lines 2020/21 2021/22 2022/23 2023/24 2024/25 Increase the frequency of publicize the results of 43 enforcement initiatives K Dispute resolution Increase URA staff numbers and training to facilitate TAT 44 to expeditiously deal with cases Lobby Government to provide adequate funding for TAT 45 to cover infrastructure and resource constraints Lobby Government to increase the perception and 46 visibility of TAT among the public. L Processing of tax refunds Develop a plan to streamline the management of offsets and refunds, including automatic cross-matching of 47 taxpayer declarations Targeted Compliance Improvement Initiatives to Mobilize Revenue M Customs and Trade Facilitation Strengthen and properly embed risk management prac- 48 tices in Customs. Develop electronic systems to record incidents in cus- 49 toms processes Strengthen capacity to monitor transit procedures, detect evasion and non-compliance, and sanction 50 offenders Customs Mutual Assistance Agreements (CMAA) and electronic exchange of information agreements with 51 major trading partners Make more pre-arrival and pre-clearance options available to facilitate the clearance of most entries at 52 Mombasa Port. 53 Enhance warehousing control. N Extractive Sector Clarify the mandate of the various agencies involved in oil extraction, gas and mining and implement memoran- da of understanding to facilitate exchange of informa- 54 tion across these agencies. Ensure that VAT refunds are paid timely and consider moving to VAT accounting on a net basis, rather than 55 budgeting for VAT refunds as a spending item. Build knowledge and expertise on tax issues unique to 56 oil, gas, and mining. Develop a targeted, risk-based compliance strategy for both the oil and gas and mining sectors. This should incorporate separate strategies for licensees as well as 56 the large artisanal mining sector. Re-design the tax return form to capture more informa- 57 tion from the extractives sector. N High-Income Self-Employed and Professionals Mandate that membership of professional bodies 58 requires a valid TIN. Ensure that URA is provided with data on professional society membership to facilitate data-matching and the 59 mitigation of non-compliance with core tax obligations
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12.4 Stakeholder Management The corporate plan 2020/21 - 2024/25 is premised on the need to promote a corporate citizenry that will enhance taxpaying culture by engaging taxpayers through, productive partnerships, leveraging technology, data and innovative staff. In order for URA to realize her performance expectations in the different areas, one of the ways is through strengthening Stakeholder collaboration which seeks to streamline stakeholder management with a focus on strengthening relations and information sharing with partners as well as building increased awareness of our service offerings. Tax administration is an enormous task that we cannot manage alone and this calls for productive partnerships as a key pillar of excellence to enable URA collectively create value and contribute to realization of her mission and vision. This Stakeholder Management Strategy reflects our commitment to continue working with stakeholders, build on past engagement experiences, building better partnerships and continue to implement effective stakeholder engagement approaches and practices across the organization. Sustaining and building productive partnerships is vital to the ongoing sustainability of the URA business hence the need to balance the ‘inside out’ with the ‘outside in’ approaches in order to achieve mutual expectations and value. URA has made great strides in recent years working with other government agencies, Members of Parliament, private sector associations, citizens, and tax intermediaries. There is need to expand our stakeholder reach, improve our communication, manage feedback, and respond in a timely manner to encourage stronger support for the work we do. This strategy provides URA with direction and principles of how to engage effectively with our stakeholders.
Stakeholder Management Goal and Principles The overall goal of Stakeholder Management is to help URA improve how we approach and engage stakeholders in order to build productive relations and partnerships. Stakeholder engagement helps the URA to build constructive relationships with important taxpayers and other key organizations and institutions. These relationships yield improvements to URA processes and policies and promote voluntary compliance. Effective stakeholder engagement reduces the cost of compliance for taxpayers and reduces URA’s cost of administering the tax system. The key principles that will guide URA to have effective and meaningful stakeholder engagements are: • Transparent – Clearly outline what stakeholders can expect from us and how their feedback will be taken into account. • Responsive- Consider and respond to concerns, provide prompt and clear feedback • Accessible & Inclusive- Have access to insights from all the stakeholders, understand the dynamics and challenges facing particular industries and invite their views on the design of engagements where appropriate to promote accessibility. • Informing- Provide sufficient information on which to base meaningful feedback and to ensure two-way communication, invite stakeholders via open, clear, relevant and timely communications. • Consistent- A proactive, coordinated and consistent approach to engagement across the business
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• Measurable- Measure the success of engagements and apply learnings in designing and developing future engagements
Stakeholder Identification Stakeholder identification is required to understand our stakeholders and their current and long term views and expectations. This is to ensure that stakeholders are identified, recognized and acknowledged as having either influence or interest in URA business. The key stakeholders, towards which this strategy is aimed, include internal, external (public and private), and others, as demonstrated below:
BED FELLOWS: Keep Informed, Satisfied & ALLIES: Involve, collaborate & keep highly engaged, use Leverage as advocates to convert fence sitters • Local Governments • Tax payers • Telecom • MoFPED, Minister of Finance, Dir. Budget, Dir. Tax • Uganda Police & UPDF Policy & PSSST • Staff Council • URA staff, CG, Board, Senior Mgt, MEC,
High • Regional Tax & Economic Bodies (ATAF, • Members of Parliament (Finance Committee, Budget OECD, COMESA /SADC /EAC) Committee, COSASE, PAC, National Economy) • Service providers • Office of the Speaker/DSP, other influential MPs • Judiciary/DPP/AG/ SG/ TAT • Ministry of Trade, Industry & Cooperatives (MTIC) • Financial Intelligence Authority (FIA)
Interest NEUTRAL: Monitor & Keep informed KEY PARTNERS: Consult, engage & Involve to convert to allies • Ministry of Education, National
/ Agreement to Change to / Agreement Curriculum Development Centre • The Presidency • Cultural & Religious leaders & institutions • Industry/Sector Associations • Association of Prime ministers/ Katikiros • Media (Traditional & New) • General Public • Professional Associations Low • Civil Society • Government MDAs • Development Partners & Donors
Impact/Power/ Influence Low High
Stakeholder Mapping An effective stakeholder engagement strategy groups stakeholders into categories based on importance and interest. Stakeholders have different requirements for information and services depending on their functions and objectives. They also have different levels of importance to URA. By categorizing stakeholders, URA is able to develop tailored engagement strategies for each group and focus more resources (time, staff, and events) on the most important stakeholders. In developing our approach to stakeholder engagement, we have applied best practice methodologies for mapping and analysis of our stakeholders. We made use of the Stakeholder Analysis Tool (shown below) to map each stakeholder into a quadrant depending on how they affect or are affected by the organization, i.e. reflecting their level of importance and interest. The output from this process was used to determine the level of engagement (monitor, inform, satisfy or empower) that is required by each stakeholder. This stakeholder analysis below was then used to develop an engagement plan. We considered their expectations and levels of interest and influence in relation to our priority areas.
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Monitor (low power, little interest) - Some stakeholders are neither very important to URA nor very interested in tax issues. URA shall not dedicate significant resources to engaging with these stakeholders but it should not neglect them either. They should be monitored in case a new development changes their relative importance or interest. • No specific communication. Monitor messages from this group because could move into another quadrant. Inform (lower power, but interested) - Stakeholders who are very interested in tax issues but are not strategically important should be kept informed. URA shall ensure that these stakeholders are aware of changes to policies and processes and provide them with a platform to provide feedback, which may be constructive given their high level of interest. • Newsletters, flyers, website, programmed emails, and big events (e.g. budget breakfast) Satisfy (high power, but less interested) – Some stakeholders are very important to URA (e.g. large businesses that pay a lot of tax) but have a low level of interest in tax issues. URA shall aim at providing excellent customer service to these stakeholders that meets their demands and limits their cost of compliance. • Leverage existing meetings, presentations, organizational briefings Empower (high power and interested) – URA shall dedicate the most resources to stakeholders that are both important and interested in tax issues. It should ensure that their requirements are met and they do not have any un-resolved issues or complaints. In addition, it should closely engage with and empower them by collaborating on the design of new policies, regulations and processes. • Personal briefings, workshops, risk and issues awareness, presentations.
Value of Stakeholder Engagement Effective stakeholder engagement should be a two-way communication process. Stakeholders should provide input, feedback, and recommendations to URA. URA shall then use this information to reform its policies, systems, processes and documentation to encourage voluntary compliance. • Information communicated by URA to stakeholders includes:
o Upcoming changes to tax policies and regulations o Future changes to administrative processes for important functions (e.g. registration, filing, refunds processing, payment schedules)
o Changes to the content and structure of products used by taxpayers (e.g. tax returns, registration forms) • Information communicated by stakeholders to the URA includes:
o o Advice on proposed changes to tax policies and regulations. Stakeholders can express
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their preferences and concerns about proposed reforms and help URA understand how they will affect taxpayers’ compliance and in turn revenue collection.
o Feedback on URA products and processes (e.g. tax returns, registration forms) to reduce cost of doing business. Stakeholders can help URA identify documents or parts of documents that are unclear or misleading.
o Suggestions from other government agencies on opportunities for interagency collaboration that would reduce operational costs and/or improve tax compliance.
Stakeholder Management Objectives & Expected Results Drawing on the key engagement principles, URA has identified key priorities to ensure that mutual interests are catered for. These include: The URA has five priority areas or objectives for stakeholder engagement. Each should be addressed in order to achieve our goal. i. Increase stakeholder awareness on tax products, policies, services, and processes ii. Increase stakeholder satisfaction on tax products, policies, services, and processes iii. Improve the credibility and relevance of URA with key stakeholders to ensure a trusting, honest, and constructive relationship iv. Increase involvement of key stakeholders in the design and development of policies, products, legislation, regulation, services, and processes. v. Improve strategic and operational coordination with external agencies including improving processes and information sharing
Stakeholder Engagement Approach Effective stakeholder engagement requires a systematic and consistent approach as well as a variety of engagement initiatives. Types of engagements are listed below and should be mapped to each segment and category of stakeholder.
Channels Responsibility Frequency Newsletters, website, programmed emails, etc. PCA Monthly Surveys PCA Twice a year Annual Budget Breakfast and similar forms PCA Annual Officers & Supervisors in Operations Monthly or as Informal stakeholder initiatives (e.g. katales) & PCA needed Officers & Supervisors in Operations Monthly or as Workshops or capacity building sessions & PCA needed Managers & Supervisors in Technical Working Group meetings As needed operations & PCA Roundtable meetings Managers in operations & PCA Quarterly, Annual Thematic/sector meetings (to address issues that Managers or ACs in Operations & As needed haven’t been addressed by technical working group) PCA Strategic partners meetings (to address issues that haven’t been addressed by thematic/sector meeting or Commissioners and CG & PCA As needed strategic partners)
The Journey to Cultivating a Taxpaying Culture 70 URA CORPORATE PLAN 2020/21 - 2024/25 COST Bn.) (UGX 10 TBD 2 cost Etax NIL TBD Informed Payers Tax Payers Tax Other MDAs Public Professional Bodies Public ROLES Consulted PAU UNOC Min of Energy Min of Energy PAU UNOC PAU UNOC Min of Energy International Bodies Audit Payers Tax Professional Bodies URA Professional Bodies UBOS Accountable MoFPED URA BOD URA MoFPED URA - Respon sible URA URA URA URSB MoFPED Timing Timing lines 19/20- 23/24 23/24 20/21- 22/23 19/20- 22/23 20/21- 23/24 URA STRATEGIC INITIATIVES INITIATIVES URA STRATEGIC 20-24 - & implement a compre Develop Capacity staff Training, hensive man - and knowledge development program agement and implement a robust Develop plan improvement Compliance and implement a robust Develop plan improvement Compliance and implement a robust Develop plan improvement Compliance - and implement a compre Develop collaboration stakeholder hensive program Develop and implement a robust and implement a robust Develop plan improvement Compliance DRMS INTERVENTIONS on and expertise Build knowledge and oil, gas, unique to tax issues mining. risk-based a targeted, Develop both the for strategy compliance and mining sectors. oil and gas separate should incorporate This as as well licensees for strategies artisanal mining sector. the large to form the tax return Re-design the from information more capture sector. extractives of that membership Mandate a bodies requires professional TIN. valid with that URA is provided Ensure mem - society data on professional data-matching facilitate to bership - of non-compli and the mitigation tax obligations with core ance - STRATEGIC STRATEGIC OBJEC TIVES Improve - Staff Knowl and edge Skills Improve Voluntary Compliance Improve Voluntary Compliance and Professionals Self-Employed High-Income Improve Voluntary Compliance Improve Voluntary Compliance DRMS INTERVENTION AND STRATEGY INITIATIVES CONSOLIDATION 2020 TO 2025 TO 2020 CONSOLIDATION INITIATIVES AND STRATEGY DRMS INTERVENTION No Inefficiencies Seizing Opportunities and Tackling 56 56 N 57 58
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