Uganda Revenue Authority (URA) and technology company RippleNami® Uganda have officially rolled out cutting edge traceability and transparency technology, which officials say is aimed at improving rental income tax compliance, the project has kicked off with both parties promising a win-win for both taxpayers and revenue mobilization efforts.
In June 2020, the Ministry of Finance, Planning, and Economic Development on behalf of the Government signed an agreement with an American Company RippleNami® Inc to provide a solution to improve rental income tax compliance for Uganda.
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The new system integrates data from various Ministries, Departments and Agencies (MDA’s) to enable proper identification of individuals and Corporations to determine rental income prior to standard deductions. The tool and the information will be solely used by URA and reports generated by the rental tax compliance system.
RippleNami® Uganda uses blockchain technology to help integrate data from the different government agencies and departments such as the Ministry of Lands, NIRA, KCCA, URSB and match the data it collects so that it is able to tell URA the owners of the different property. It goes further to inform the tax collector what income comes out of the various properties.
The system determines the nature of occupancy i.e. whether a property is owner-occupied or rented out, determine the occupancy period, providing for current and previous periods, determine the estimated rental income assessable to rental tax to be paid prior to standard deductions from each property and by each property owner and provide a clear address for each property identified for ease of reference.
URA has noticed that some tenants who pay for example UGX 3 million, end up taking a receipt of only UGX 300,000 (a tenth of what they actually pay) so the rental income tax compliance system will help the landlord declare the correct rent. Tenants are also worried about the impact of this new system and how it may affect future rent prices.
