Uganda is preparing for an upcoming peer Review of its tax and financial information protection and exchange practices, aimed at enhancing its international financial integrity reputation. This review will be conducted by experts from the Global Forum on Tax Transparency and Exchange of Information, marking the second such review since 2015 when Uganda joined the forum.
John Musinguzi, the Commissioner General of Uganda Revenue Authority (URA), emphasizes that this exercise is part of strategic initiatives to remove Uganda from the transactional grey list, signifying a dedicated effort to promote international financial integrity. Musinguzi highlighted that this review will demonstrate Uganda’s readiness to join a group of 168 countries that freely share tax and financial information.
This sharing of information will enable the authority to access accurate data concerning multinational and cross-border investigations. He further explained that since 2014, the authority has handled up to 236 information requests and collected 256 billion shillings as a result of Global Forum interventions. This has led to improved tax compliance and a better understanding of taxpayers’ obligations.
Following the 2015 review, Uganda received a “largely compliant” rating, the second-highest rating in that review. Musinguzi emphasized that this time, Uganda aims to improve its rating since the current one comes with substantial costs. Non-compliance could lead to consequences such as blacklisting, increased business costs, supply chain delays, and more. Uganda is determined to avoid these repercussions by achieving compliance.
The review process evaluates the standards set by the Global Forum, of which Uganda is a member. It assesses the legal and regulatory framework for information exchange and its practical implementation. According to Musinguzi, Uganda has made progress based on the recommendations of the 2015 review.
Moses Kagwa, the Director for Economic Monitoring in the Ministry of Finance and Economic Development, called on all government agencies to cooperate and support URA in this review. He stressed that the rating impacts not only URA but the entire country’s economy, affecting all sectors.
“As agencies, we have the power to determine the rating of Uganda’s peer review report by illustrating that we have the legal framework in place for the availability of the legal and beneficial ownership information, accounting information, banking information and that in practice, it can be accessed by URA upon request and, in some cases, directly as a result of systems integration and liaisons. We are all in this together,” he urged.
Kagwa urged agencies to illustrate that Uganda has the necessary legal framework for the availability of ownership information and that URA can access it effectively. He emphasized the importance of collective effort in this endeavor.
Kagwa also noted that Uganda’s financial integrity record needs improvement, as the country is facing concerns about being placed on the grey list as a potential hub for money laundering. The resultant ratings from this review hold significance for international companies’ decision-making processes and investment considerations in Uganda. Many multilateral development banks consider the Global Forum rating in their policies, and international supply chains are influenced by these ratings, impacting business transactions and the cost of doing business in Uganda.
Agnes Rojas, a tax policy adviser at the Global Forum Secretariat and lead assessor for the Uganda review, explained that this review will assess Uganda against updated terms of reference since the 2015 review. The assessment will also examine the legal framework facilitating information exchange and its implementation by responsible agencies.
The information gathering for this review begins tomorrow, with the review process set to continue until June 2024. The period under review spans from January 2020 to December 2023.
