Taxation is the lifeblood of any economy, and Uganda is no exception. For decades, tax collection has been pivotal in financing national development, fostering infrastructure growth, and ensuring the delivery of public services.
The Uganda Revenue Authority (URA) stands at the forefront of this mission, enforcing compliance while promoting taxpayer rights.
However, the relationship between taxpayers and the URA must be built on mutual understanding of rights and obligations to ensure harmony and trust in the tax system. As we traverse 2025, a year that promises seamless engagement if taxpayers and the URA align their responsibilities and entitlements.
My article explores the legal framework that defines taxpayers’ rights and obligations, the benefits of mutual compliance, and the measures to bridge any gaps that may arise in tax compliance within Uganda.
At the heart of Uganda’s tax system lies the Tax Procedures Code Act, 2014, which consolidates procedures for tax assessment, payment, and enforcement. This legal instrument empowers the URA to execute its mandate while safeguarding taxpayer rights. Compliance, therefore, is not just a moral obligation but a legal requirement.
The Act establishes a structured process for tax administration, ensuring that taxpayers have clear guidelines on their obligations while being accorded protections to prevent exploitation or unfair treatment.
By understanding this foundation, taxpayers can avoid penalties, optimize their tax positions, and contribute meaningfully to Uganda’s economy.
Every taxpayer in Uganda, whether an individual, SME, or large corporation, has specific obligations that must be met under the law. These, among others, include:
- Registering for a Tax Identification Number (TIN): This serves as the gateway to the formal tax system.
- Timely and Accurate Filing of Returns: Taxpayers must file returns within prescribed deadlines to avoid penalties. We have those that must be filed on a weekly basis, a monthly basis, a quarterly basis, and an Annual basis.
- Payment of Tax Due: All assessed taxes must be paid promptly to ensure compliance.
- Maintaining Proper Records: Accurate records of transactions, income, and expenditures must be kept for audit purposes.
- Providing Information to URA: When required, taxpayers must disclose necessary documents for tax assessment and verification.
The Tax procedure clarifies that failure to meet these obligations can result in penalties, interest, or even prosecution, underscoring the importance of adhering to compliance requirements.
While taxpayers are obligated to comply, they also have rights that protect them from unfair treatment. These include:
- Right to Fair Treatment: Taxpayers have the right to be treated with respect, professionalism, and fairness by the URA.
- Right to Accurate Information: Taxpayers are entitled to clear and accurate guidance on tax laws, policies, and processes.
- Right to Object and Appeal: If dissatisfied with an assessment, taxpayers can object or appeal through legal channels. A taxpayer who is dissatisfied with an assessment may lodge an online objection with reasons to the Commissioner within 45 days after being served with a notice of assessment. The process can as well move to the Tax Appeals Tribunal (TAT), High Court, and other high courts of the land!
- Right to Privacy: Information provided to the URA is confidential and must not be disclosed without legal justification.
- Right to Refunds: Taxpayers are entitled to claim refunds for overpaid taxes.
These rights ensure that taxation remains just and transparent, fostering trust between the URA and taxpayers.
A failure to balance taxpayer rights and obligations creates inefficiencies and mistrust in the tax system. For instance:
- Non-Compliance: When taxpayers feel burdened or uninformed, they may resort to evasion or underreporting income, leading to revenue loss for the government.
- Harsh Enforcement: Excessive penalties or aggressive enforcement by the URA can discourage voluntary compliance and alienate taxpayers.
- Economic Consequences: A widening gap results in reduced tax collections, affecting the government’s ability to fund critical services like healthcare, education, and infrastructure.
To close this gap, a collaborative approach is necessary, where the URA educates taxpayers and enforces compliance fairly, while taxpayers meet their obligations responsibly.
When taxpayers and the URA understand and fulfill their rights and responsibilities, taxpayers benefit by avoiding penalties and interest, planning finances effectively, and building trust with the URA, while the government achieves increased voluntary compliance, improved tax revenue for national development, and reduced enforcement costs, ultimately fostering a balanced tax system that enhances trust, encourages growth, and ensures sustainable revenue collection.
As we traverse 2025, both taxpayers and the URA must take proactive measures to ensure seamless compliance by enhancing taxpayer education through expanded programs on obligations and benefits, strengthening digital tax platforms to improve efficiency, promoting voluntary compliance with incentives like tax holidays, fostering dialogue through regular forums to address concerns, and encouraging taxpayers to prepare for year-end planning by assessing obligations, seeking professional advice, and ensuring timely filings.
As Uganda looks forward to a successful 2025, the relationship between taxpayers and the URA must be anchored in mutual respect, understanding, and collaboration. By balancing rights and obligations, we create a transparent and efficient tax system that supports national development and economic growth.
Taxpayers, take charge of tax compliance. The URA remains steadfast in promoting fairness. Together, let’s have a renewed commitment to progress, partnership, and prosperity. “When rights meet responsibilities, nations grow.”
The writer is a chartered Tax Accountant & Advisor
