The Uganda National Association of Builders, Suppliers, and Engineering Contractors (UNABSEC), in partnership with the Uganda Revenue Authority (URA) and National Cement Company Uganda, held a landmark symposium today aimed at enhancing tax compliance and efficiency in Uganda’s construction sector.
Under the theme, “Enhancing Tax Compliance and Efficiency in the Construction Sector Through Dialogue,” the event provided valuable insights into tax regulations, compliance requirements, and tackled the unique challenges faced by contractors, suppliers, builders, and manufacturers.
Mr Gerald Wamoma, a principal economist in the Ministry of Finance’s tax policy department, represented the Permanent Secretary to the Treasury (PSST) at the symposium.
He emphasized the need to educate stakeholders on tax compliance, stating that UNABSEC plays a critical role in revenue generation through taxes on building materials.
“UNABSEC is an agency of revenue through taxes from supplies in the sector. We also have non-tax revenue, but we must focus on developing the economy,” he said.
Wamoma noted that while the ministry operates a stable tax regime in sectors like construction, tax compliance remains low, although incentives are available for certain imported machinery not manufactured locally.
UNABSEC President, Mr Jamesone Olonya, highlighted the importance of the symposium, especially for new entrants in the construction business.
He stressed the need for tax education, given the sector’s significant contribution to the national GDP, second only to agriculture.
“Many of our members have recently entered the business, and they need to be sensitized about tax compliance,” he said.
Olonya also outlined several challenges plaguing the construction sector, including the 6% withholding tax obligation, URA’s Electronic Fiscal Receipting and Invoicing System (EFRIS), and penalties for non-compliance.
He explained that many suppliers, particularly in rural areas, are not registered with URA or EFRIS, which increases the cost of materials and adds to contractors’ financial burdens.
Additionally, the 6% withholding tax requirement places further pressure on local suppliers who are often unfamiliar or unwilling to meet this obligation, forcing contractors to bear the extra costs to remain compliant.
Olonya further criticized URA’s handling of tax assessments, alleging corruption and overassessment by officials, leading to inflated taxes and unnecessary project delays.
“Some URA officials deliberately inflate tax assessments to extort bribes, undermining the integrity of the tax system,” he noted.
Hafsa Sseguya, URA’s Tax Education Supervisor for the central region, stressed the importance of the dialogue in bridging the tax knowledge gap in the construction sector.
She highlighted the role of URA’s digital tools and the need to address challenges related to digital compliance.
This inaugural construction sector tax symposium is expected to set the foundation for future engagement and education on tax compliance. UNABSEC Board Member, Mrs Kiara Binta Nkuranga, emphasized that it was the first of its kind, aimed at offering tax education to their members.
Mariam Namiya, acting executive director of UNABSEC, reiterated the association’s commitment to addressing tax challenges within the industry and ensuring compliance among its members.
