There is a thin line (if any) between a political related discussion and that on taxation. It goes without mention that the two have a parasitic relationship, however distant one may choose to look at it. Wherever there is political discussion, you should be surprised if the conversation goes without opinionated facts defensively presented in raised voices wielded in concrete emphatic tones. Faces twitch with bulging eyes as seasonal wrinkles easily fade and rise on a face where they may not be traceable once the conversation is done. One thing though about political discussions is the way in which, often times, the participants are smartly dressed like they won’t be believed were they not to be. Much as the discussion may rage on for hours without end, usually, you have no winner. Everyone wins and everyone loses. As such are discussions related to tax.
Tones are leveled, endless gesture expressions of points that are failing to sink in. Endless scribbling down of figures for emphasis and more. With tax related conversation, there is always that one lead discussant whose role is to explain the details, the difficult terms and how they come about. To a lay person, this person’s role is to confuse you till you can understand no more and consequently lose interest in the conversation.
Thanks to the World Bank Uganda team who knew these difficulties beforehand and decided to address them in our meeting with them. In growing economies like ours, we tend to find it hard to commit to paying taxes. We always have that one other reason as to why this tax is inappropriate and that tax is uncalled for. Rarely does it come out of will to have the taxes filed. Those who do deserve a pat on the back. Last year, Uganda Revenue Authority released a list of faith based organizations paying tax and you could tell that even among the men of God, paying back what belongs to Caesar was not coming with much ease. But why be judgmental? We are all human struggling to swallow this bitter pill.
As a nation, there is a lot of subsistence living within both the rural and the urban and it is done in such a way that it goes without record keeping. It cannot be traced. Growing a tax paying culture may (and will) take some time.
One thing about a conversation on tax is that it is first individual before it gets to a whole. An individual needs to find out how their paying tax will be of help to them. “I stay in Kira and my road has not been worked on for the last five years I have been there.” Such deeply seated sentiments ought to be addressed before one can talk of how the entire national tax collected only contributes 13% to the Gross Domestic Product (GDP).
Common in the news today is the latest update from URA of where next they are going to raise the tax. The tax pool has been growing wider since the year began and many people are not happy about it, partly because not much explanation is made as to why. No one is coming out to say that only one million of the forty plus population actively pays their tax. It goes without mention that a number of professional firms are not paying tax and neither is there a format of how they should be taxed. And yet a number of emerging firms are suffocating because of too much tax, also at times, unexplained. That a lot of tax is on income yet a lot goes untaxed under the consumption bracket.
There is need to have an organized system where tax collection is known, where the pools are defined and clearly labeled. Maybe then and there, there will be fewer numbers of people fidgeting with the tax payment process to survive. Maybe then, we shall all take part in the celebration of a growing tax base that currently stands at only 55%. By closing the leakages in the current instruments of tax collection and improving online platforms like PIN acquisition will enable many to take part in the process.
That if we could have the government deliberately declare what the tax does, where it goes and who is responsible for what, there will be fewer questions and more answers. Until then, the design remains so good on paper and yet poorly implemented.
Like Racheal Sebudde emphasizes, tax is a burden that should be put in place but with ways that make its payment a welcome gesture other than a runaway factor. Until then, we may never know that in countries like Denmark, the government takes away 50% of one’s income and they make sure that public services are duly provided.
Abstaining from having conversations on tax will only distance many from making their contribution towards tax payment. Let’s talk tax, shall we?