UNABSEC, URA convene to discuss tax compliance & challenges in the Construction sector.

Uganda National Association of Builders, Suppliers and Engineering Contractors (UNABSEC) together with Uganda Revenue Authority (URA) and National Cement Company Uganda have today held a symposium aiming at providing valuable insights into tax regulations, compliance requirements and addressing the distinct challenges faced by contractors, suppliers, builders, manufacturers and all stakeholders in the construction industry.

The theme of the dialogue was: "Enhancing Tax Compliance and Efficiency in the Construction Sector through Dialogue"

While talking at the dialogue, Mr. Gerald Wamoma, Principal Economist in the tax policy department, Ministry of Finance, planning, and Economic Development who also represented the PSST said this symposium aims at educating the public about tax compliance.

He also said in the construction sector, as the ministry, UNABSEC acts as an agency for revenue that comes from the suppliers of building materials.

"UNABSEC is an agency of revenue through tax from supplies in the sector, we also have nontax revenue but we have also to develop the economy," he said

He further said they are operating a stable tax regime, especially in critical sectors like construction by making sure whoever has to remit complies. He says there are incentives given to some products, though there's a low tax compliance in the construction sector

"In the construction, we do not tax machinery that is imported in case it's not available in the country "

Mr. Jamesone Olonya, the president of UNABSEC while addressing journalists have a brief of who they are said they have come up with this symposium with URA because many of their members have just come in business and they need to be sensitized about tax compliance since the construction sector is second to agriculture in the national GDP contribution.

"We are a 31-year-old non-profit, member-driven, national trade association of over 440 Genuine Builders, Suppliers, Contractors, and other Companies and Organizations engaged in the Construction Sector in Uganda. Our core purpose is the commitment to improving performance in the Construction Industry by championing better regulation and enhancing operational integrity, and have continuity. We are dedicated to fostering growth and sustainability in the Construction Contractors, improving job site safety, expanding the use of technologies and techniques, and strengthening the relationships between Contractors, Clients and Government. Therefore, we are the principal interface between the Construction Industry, the public, development partners and Government" he said

He also highlighted some of the challenges faced by the industry which include withholding tax, and EFRIS, among others.

"High Tax Burden: Electronic Fiscal Receipting and Invoicing System (EFRIS): URA’s mandate requires the use of EFRIS for all transactions poses a significant challenge for Contractors (I am sure it affects other players as well)” he said

He noted that many members encounter challenges of heavy penalties imposed on principal taxes. A

particular member attempted to make the tax payment, only to find that the URA

system was inaccessible due to technical difficulties towards the end of December 2023. As a result, the member incurred penalties, and interest continues to accrue

on these penalties.

On Corruption he said that “We shall not be shy to deal with the issue of corruption involving URA officials,

because its real and presents a significant challenge for Providers. The challenges

our members face include; Overassessment of taxes and unnecessary delays in the assessment process, URA officials often deliberately inflate tax assessments to extort bribes from companies, creating a culture of corruption and undermining the integrity of the tax system.

He urged the government to get an effective way of generating tax from the construction sector because most of them do not do good bookkeeping, especially in the upcountry.

" I request the government to look for a more conducive way to withhold the 6% tax and also be sensitive about all the URA dynamics, especially to the low providers,” he said

Hafsa Sseguya, a supervisor of TAX education in URA in the central region says they are having a tax dialogue with UNABSEC, one of their stakeholders which puts together contractors, engineers, builders, and suppliers to the sector about tax education to reduce the tax knowledge gap, " we are here to sensitive the building sector on tax compliance, when and how to comply because ideally we have gone digital so it's very impressive to show our digital applications and also to address some digital challenges which can bring some delays in execution "

Mrs. Kiara Binta Nkuranga, a UNABSEC board member says this is the first ever construction sector tax dialogue to offer TAX education to their members.

Mariam Namiya, The acting Executive Director of UNABSEC, also a board member says they have organized this in order to address challenges in the construction sector, especially in terms of TAX

"UNABSEC is the body that takes all contractors, so we realized that among the challenges we faced as an industry, is TAX noncompliance so we are here to address that, among others"