A recent meeting between Uganda’s non-governmental organizations (NGOs) and the Uganda Revenue Authority (URA) saw heated discussions over the complexities NGOs face with tax exemptions and compliance.
The dialogue aimed to address long-standing issues such as delayed tax exemption processes, lack of clarity in tax regulations, and challenges in tax ledger reconciliations.
Mr Xavier Ejoyi, chairperson of the Uganda National NGO Forum, expressed the frustrations many NGOs encounter, citing prolonged processes, lost documents, and inconsistent decisions across URA departments.
“The delays in obtaining tax exemptions are severely impacting our ability to fulfill donor obligations,” he said.
Mr Ejoyi highlighted an example where an NGO faced repeated applications for tax exemptions when importing bicycles to serve communities, emphasizing how administrative delays hamper their service delivery.
In response, Dorothy Oroma, supervisor of domestic taxes at URA, acknowledged the concerns but attributed some delays to NGOs’ non-compliance.
“Many NGOs mistakenly believe they are inherently exempt from taxes, which leads to issues like failure to submit audited financial statements,” Oroma said.
She reassured the attendees that moving forward, applications would be processed within 30 days if all required documents were in order.
URA has also stationed a dedicated team to streamline the exemption process.
NGOs also raised concerns about complex tax ledger reconciliations, which have led to financial penalties.
Ms Oroma responded by outlining improvements to the ledger system, noting that a new, simplified display would help NGOs better track their tax records.
A team of 40 URA staff has been assigned to assist clients with ledger issues.
The meeting also addressed the contentious issue of tax assessments on donor funds. Xavier argued that some URA officers were treating grants as taxable income, contrary to existing bilateral agreements between Uganda and donor countries.
NGOs called for more transparency and efficiency in URA processes, requesting additional training to help them better understand tax obligations and exemptions.
In a positive move towards collaboration, URA agreed to partner with the NGO Forum to host capacity-building workshops aimed at enhancing NGOs’ awareness of tax regulations.
“We want to create a conducive environment for NGOs to operate without tax regulations hindering their impact on Ugandan communities,” Oroma said.
The dialogue, which was attended by over 50 NGO leaders, marked a significant step towards resolving tax-related challenges, with both parties committing to ongoing engagements.
Key Issues Raised
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- Difficulty in obtaining tax exemptions, with protracted processes and lost documents
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- Delayed responses from URA, impacting NGO operations
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- Complex ledger reconciliations leading to penalties
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- Ambiguity in tax regulations, with inconsistent interpretations across URA offices
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- Calls for more training and capacity-building workshops to help NGOs understand tax requirements
