The Uganda Revenue Authority (URA) has started implementing the Rental Tax Compliance System (rTCS), a software that it hopes will help improve tax payments among owners of rental properties.
According to URA, the new software collects all data about real estate properties and matches them to their individual or corporate owners.
URA Commissioner General John Rujoki Musinguzi says about 8 percent of landlords are tax compliant but that with the new rTCs, many will come on board.
“We estimate only 8% of landlords are in full tax compliance. This low level of compliance among landlords is unfair to other compliant taxpayers from other sectors of the economy. The trend also significantly reduces the much-needed revenue required to enable government services to the citizens,” Mr Musinguzi says.
“With the roll out of the Rental Tax Compliance System and this trend is set to change for the better,” he adds.
Last year, government through the Ministry of Finance contracted RippleNami, an American technology company to develop the Rental Tax Compliance System that enables government integrate data to match real estate properties to their individual or corporate owners.
Through intricate data analysis and optimization, this technology integrates various data types from selected Ministries, Departments and Agencies (MDAs), matching properties in the Greater Kampala Metropolitan Area to their beneficial individual or corporate owners on the URA tax register.
The tax body is also investigating each of the identified taxpayers by employing various analytics to prove occupancy for the last five years.
“URA also reminds other non-compliant landlords to take advantage of the Voluntary Disclosure programme before the Rental Tax Compliance System identifies them,” he said.
The Voluntary Disclosure programme provides an opportunity for taxpayers to voluntarily declare their outstanding tax obligations and pay the principle tax in exchange for a waiver of interest and penalties accruing thereto.