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URA, UNABSEC Collaborate to Enhance Tax Compliance, Ease Construction Sector Challenges

by JOSEPH NSIMBI | UG STANDARD REPORTER
28/09/2024
in Business
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Key stakeholders engage in constructive dialogue during a roundtable discussion on enhancing tax compliance in Uganda's construction sector
Key stakeholders engage in constructive dialogue during a roundtable discussion on enhancing tax compliance in Uganda’s construction sector

The Uganda Revenue Authority (URA) has partnered with the Uganda National Association of Builders, Suppliers, and Engineering Contractors (UNABSEC) to improve tax compliance among contractors and suppliers in the construction industry.

At a symposium held in Kampala, URA officials and industry stakeholders discussed challenges facing the sector.

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Gerald Wamoma, Principal Economist in the Tax Policy Department of the Ministry of Finance, emphasized the importance of tax compliance. “The purpose of this symposium is to raise public awareness regarding tax compliance,” he said, adding that the ministry collaborates with UNABSEC to collect taxes from suppliers of building materials.

UNABSEC President Jamesone Olonya highlighted the industry’s contributions to Uganda’s GDP and the challenges members face. “Our core purpose is commitment to improve performance in the Construction Industry by championing better regulation and enhancing operational integrity,” he said.

Olonya pointed out several challenges confronting the industry, including withholding tax and EFRIS. “URA’s requirement for companies to act as agents for the 6% Withholding Tax places an additional financial burden on providers. Many local suppliers are unfamiliar with this tax obligation and are often unprepared or unwilling to pay it.”

He also alleged corrupt practices within URA. “URA officials often deliberately inflate tax assessments to extort bribes from companies, creating a culture of corruption and undermining the integrity of the tax system.”

Hafsa Sseguya, URA Supervisor of Tax Education in the Central Region, stressed the need for digital tax processes and education. “Our goal is to educate the construction sector on tax compliance, specifically when and how to comply,” she said.

Kiara Binta Nkuranga, UNABSEC Board Member, welcomed the partnership with URA. “This tax dialogue will provide valuable insights and education to our members.”

Mariam Namiya, Acting Executive Director of UNABSEC, emphasized the symposium’s objective. “We organized this event to tackle the challenges faced in the construction sector, particularly regarding tax issues.”

Olonya called on the government to establish a more effective method for collecting taxes from the construction sector. “I request government to look for a more conducive way to withhold the 6% tax and also sensitive about all the URA dynamics especially to the low providers.”

Regarding substandard work in Uganda, Olonya stated that UNABSEC has established internal mechanisms to oversee legitimate members. “We encourage all contractors to join our organization and seek guidance from various entities.”

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