ENAHANCING VAT COMPLIANCE MANAGEMENT UGANDA’S CASE By Bahiyyih Basemera

Why enhance compliance IMPROVE VOLUNTARY COMPLIANCE Registration, filing, payment, proper records leads to; Increase revenue collections. Reduce VAT administration costs. Impact taxpayer behavior.

Compliance Enhancement Actions taken One stop center for all tax types.ie VAT is no longer handled in isolation Staff training as total tax person i.e in managing all tax types Taxpayer segmentation ie Large, medium and small & Public sector Office Enhancing service delivery through modernization of processes, systems and people. E tax available to taxpayers 24/7 and for all processes ie -Registration -record keeping -Filing -Payments

Compliance Enhancement Actions taken cont’d E tax available 24/7 for staff ; -report extraction -Data analysis -viewing of returns, payments ,profiles etc -Audit process -Refund processing

Routine and refund Audits ROUTINE AUDITS Include comprehensive audits, field issue and desk audits and return examination. Operated through a National Audit Plan-Annual Audit done by designated audit centers country wide Case selection is risk based and automated Cases are selected per sector wise risks ie wholesale trade, manufacturing and construction are the current year risky sectors. Audits are automated and every activity is online from initiation to assessments and reports . Case tracking is online.

Refund Audits REFUND AUDITS Include mainly refund audits mainly Return/ refund application is online Working papers and approval is online and always case tracking No paperwork involved up to payment by Finance Department

Challenges/issues encountered Risk identification and Case selection-headquarters function Audit time management -Incomplete information- Taxpayer and e tax -Network issues 3. Wrong Refund /offsets claims -wrong registration for VAT ie investment traders -Input tax verification-missing invoices physically and in etax -exports/imports –missing in Asycuda /Single Customs Territory

Challenges cont’d -misclassification of sales -Input tax apportionment 6. Sales suppression specially multinationals related parties. 7. Transfer pricing and E- commerce transitions still a challenge 8 . Real time 3rd party information lacking ie some Imported services go untaxed 9. Staff competence /connivance- IT skills for telecom, financial & oil and gas audits 10. The VAT Act/Double taxation agreements are not very effective

wayforward For risk identification-allow additions to the audit plan. Guidelines for refund and for VAT registration amended International tax unit to handle transfer pricing issues and e-commerce has been put in place in LTO. Joint audits by staff across departments-including sector studies Specialized training started ie Oil unit, international tax E-hub for data management has been started Receipt campaign has started The VAT is being amended and improved continuously and DTA’s to be renegotiated.