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Museveni sets up outfit to fight URA corruption

BE Editor 5th Jul, 2024 Economy Business Edge Reporter
Museveni sets up outfit to fight URA corruption

Mr. David Kalemera appointed to head the new State House Revenue and Strategic Operations Unit.


President Yoweri Museveni has set up a new unit at State House, aimed at keeping an eye on Uganda Revenue Authority and curb corruption in the tax administration system.

The unit, dubbed, State House Revenue and Strategic Operations Unit, is to be headed by David Kalemera, according to a July 5 press release.

“The creation of the unit will help the Government close revenue leakages and boost tax collection,” the press release said.

  • Not much is known about Kalemera’s civil service credentials but the press release said he has also been appointed Senior Presidential Advisor.

Whether or not the State House Revenue and Strategic Operations Unit would succeed is another matter, but faced with declining donor aid and pressure to reduce public debt, President Museveni’s government is under immense pressure to seal leakages and bolster its revenue mobilization efforts.

Apart from rampant corruption within Commissioner General Musinguzi Rujoki's URA, the country also faces challenges with tax policy implementation as well as compliance and enforcement, leading to tax evasion and avoidance practices across the various sectors, which lead to hefty leakages in the tax system.

  • Uganda's tax to GDP ratio - the total tax revenue collected by the government as a percentage of the country's Gross Domestic Product (GDP) - currently stands at about 14%, lower than Rwanda’s 17% and Kenya’s 19%.

For example, in a December 2022 report to Parliament, the Office of the Auditor General faulted URA for failure to collect gold tax worth UGX340bn from gold exporters, despite the players in the industry reaping almost UGX7 trillion from gold trade.

Additionally, Uganda suffers from the chronic abuse of the tax exemption system, with reports showing that revenue foregone due to tax exemptions continues to rise. For example, in FY 2018/2019, the government estimated revenue foregone from tax exemptions to be approximately $400 million.

To finance the UGX72 trillion budget for the new financial year, URA was handed a record UGX 32 trillion revenue target, though the chances of hitting last year’s target are also slim.

Barely two months ago, Kampala city traders closed their shops in protest against URA’s new tax collection tool dubbed EFRIS, which forced President Museveni to intervene and stop URA’s hefty penalties for non-compliance.

  • Kalemera’s new unit joins a plethora of outfits both at State House and elsewhere that have been set up to fight corruption in the country, but without much success.
  • Whether he will succeed where others are failing is what remains to be seen.

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