Lack of coordination between ministries, departments and agencies of government (MDAs) is costing the country billions of shillings in revenue, according to the latest Auditor General (AG)’s report.
The AG report for the Financial Year 2018/2019 exposes MDAs uncoordinated working methods, resulting in revenue leakages that could have easily been plugged with just a little bit more collaboration with Uganda Revenue Authority (URA), the tax prefect.
For example, the report highlighted a total of Shs54 billion that was never collected due to non-coordination between URA and the Gaming board. Additionally, Shs393.8 billion was never collected due to failure by URA to access the Integrated Financial Information Management System.
Furthermore, a number of expatriates do not remit PAYE (Pay As You Earn) tax due to failure by the Directorate of Immigration to share timely manner work permits information with URA. For the same reason, several driving permits are being issued without paying the requisite taxes. The same situation plays out at the Ministry of Lands where instruments are registered without paying the necessary stamp duty.
It further became evident in a joint statement issued by Civil Society Budget Advocacy Group (CSBAG) and Anti-Corruption Coalition Uganda (ACCU) on behalf of like-minded CSOs that the continuous practices of MDAs and local governments charging wrong expenditure codes to a tune of Shs384.8 billion has since become a matter of concern.
This is because such practices not only undermine the budget process since funds are not actually used for its intended purpose but also leads to financial misreporting.
The report went ahead to disclose that a total of Shs303.3 million was mischarged by Naads, Shs169.7 million by Uganda Coffee Development Authority and Shs599.3m by Uganda Tourism Board.
At Local Government level, the situation was even worse where mischarges of Shs1.5b and Shs1.5b was registered from districts such as Apac, Kasese, Bundibugyo, Luweero and Kapchorwa. This bad practice was also noted in the municipalities of Fort Portal, Jinja and Kamuli.
This according to budget experts, policy analysts and anti-corruption crusaders implies that accounting officers have fallen short of observing the Public Finance and Accounting Regulations which call for accounting for advances by MDAs and local governments.
The AG report also observed duplication of investment among government entities which in essence increases borrowing among agencies and increased maintenance costs.
A review of the harmonisation map of the optical fibre network in the country revealed that NITA-U and UETCL were building identical infrastructure on the same routes, such as in Kampala, Malaba, Mbarara, Kasese, Tororo and Karuma.
Also, the procurement of an Enterprise Resource Planning system by URA at a cost of Shs32b for the supply, implementation, support and maintenance instead of adopting the Integrated Financial Management System (IFMS) as a cheaper option from Ministry of Finance.
Call for sanity
As a result, a section of the taxpayers are unhappy with the state of affairs, calling for sanity to prevail.
“Our recommendation has always been that MDAs and URA should collaborate more through sharing information and data as a way of addressing the revenue leakages arising from non-collaboration among government entities,” the executive director of ACCU, Ms Cissy Kagaba and the executive director of CSBAG, Mr Julius Mukunda, said in a joint statement addressing CSOs concerns on the Office of the AG report for financial year 2018/2019.
But before that, URA expressed disappointment, saying MDAs lack of coordination has an impact on revenue mobilisation and compliance.
While recently reporting the revenue performance for the period July to December 2019, URA Commissioner General Doris Akol said the tax body collected net revenue of Shs9 trillion and posted growth in revenue of 11.15 per cent in comparison to the same period in the FY 2018/2019. However, the out-turn is short of the projected half-year revenue collection target of Shs9.7 trillion by Shs697 billion.