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COUNTRY PROFILE

1. COUNTRY PROFILE. Population 33 million Per Capita GDP $ 504 GDP growth 6.1% but expected 7.2% GDP composition: 22.5%- Agriculture Sector (75% of population depend on subsistence agriculture), 25.1 - Industry Sector, 52.4% - Service Sector Tax/GDP ratio 12.16%

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COUNTRY PROFILE

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  2. COUNTRY PROFILE • Population 33 million • Per Capita GDP $ 504 • GDP growth 6.1% but expected 7.2% • GDP composition: 22.5%- Agriculture Sector (75% of population depend on subsistence agriculture), 25.1 - Industry Sector, 52.4% - Service Sector • Tax/GDP ratio 12.16% • Inflation estimated at 5.5% but currently at 11% due to crude oil prices, and prolonged drought both putting pressure on food prices 2

  3. STAKEHOLDER EXPECTATIONS • The main challenge facing public financial management of governments in developing countries is how to find resources to fund national development. • Consideration about the potential to increase public spending on basic social services such as health and education are crucial for the achievement of MDGs and NEPAD. • The current focus on DRM as one of the means of creating fiscal space by governments in developing countries is recognition of reducing aid inflows and the need for economic independence. • Government revenue from tax sources are considered a better option over borrowed sources on the grounds that they impose no further debt burden on the public. 3

  4. KEY ENHANCEMENTS • Formation of URA 1991 • Reform and Modernization program 2004 • Flatter and leaner organizational structure • Establishment of Staff Compliance Office • Tax Payer Education Program • Robust staff capacity building program • Rebranding of URA • Processes and systems review 4

  5. PROCESSES AND SYSTEMS • BPR done and new process developed, resulting in a process driven DT structure from a function based structure. • Tax Payer segmentation • Integration of domestic taxes (HQ versus field operations) • eTax built to support DT processes • E-registration, E- returns, E- payments • Automated audit and investigation modules • Support Documentation management • Integration with Customs Asycuda • Interface with IFMS for Government payments to suppliers 5

  6. PROCESSES AND SYSTEMS • Asycuda upgrade and migration to Asycuda World • Raddex – Revenue Authorities Digital Data Exchange • One-Stop Border/24 hour operations in 4 major stations and extension of working hours for inland stations up to 11pm. • sms functionality enhancement to allow taxpayers view the status of their transaction (available in May) 6

  7. PROCESSES AND SYSTEMS • URAnet – WAN for voice and data communication • SUN- system implementation for financial accounting • Data Centre for centralized service • Disaster recovery facility • 24 hour Web portal for single access to URA systems • Call Centre (extend to 24 hours in April) 7

  8. PROCESSES AND SYSTEMS 8

  9. PROCESSES AND SYSTEMS 9

  10. HOWEVER 10

  11. HOWEVER 11

  12. LINGERING CHALLENGES • Informal Sector at 40% of GDP • MNEs with Aggressive tax planning schemes • Stability of the Tax Policy regimes • Low VAT productivity ratio at 4.2% compared to Kenya & TZ who are at 5.6% 12

  13. LINGERING CHALLENGES • Performance Equity considerations: LTO brings in 70% of tax revenues. • Regional Integration – Pressure on trade taxes • NO National ID Card and Geo Positioning Systems • No Auto linkage with Banking Sector 13

  14. PROSPECTS • A robust modernization plan offers a whole taxpayer control’ approach which brings together all the taxpayer’s transactions into one account. • Commitment to have ‘a register of all existing incentives and exemptions…their cost and revenue impact’ will be done. • Implementation of taxpayer procedure code • New sources of revenue - Oil 14

  15. PROSPECTS • National Identity Card System in progress • Implementation of New Corporate Plan based on BSC • Opportunities for exchange of information and enforcement using Double Tax Agreements • Opportunities for Capacity development using the ATAF framework 15

  16. THANK YOU 16

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