Changes to URA’s portal should enhance taxpayers’ experience

Until recently, many of us have been able to easily navigate the URA web portal, eyes closed. And this is simply because the e-tax platform has stayed relatively unchanged since its launch in 2009.  Recently however, the URA has introduced a number of quite extensive changes which may require every taxpayer to refresh themselves with the new platform. In short, prepare to unlearn and learn.

Before we jump into these changes, let’s look at a brief history of URA’ s digital transformation journey.

In 2009, in a bid to improve efficiency in tax administration and revenue collection, URA launched its e-tax portal. This move saw several processes such as TIN registration, tax return filing, and tax payments migrate from a manual process to one done online. As a result, compliance levels shot up, and so did government revenue.

For those of us who were around before that time, trying to beat the Kampala traffic to get to a URA office or to a bank before 5pm to file a tax return or to make a tax payment so as to avoid late filing and payment penalties was no laughing matter.  Suffice to say therefore, that the online platform was a welcome move.

Since that time, the URA portal has remained relatively stable, albeit with incremental tweaks. However, in a bid to improve efficiency and enhance taxpayers’ experience, URA embarked on a radical transformation of the e-tax portal in October 2023.

According to URA, the new portal is easier to navigate, consolidates all URA systems, and will even support multiple languages. In addition to changes in the general layout, some of the key functional changes are highlighted below:   

Tax payment mapping – URA has redesigned the payment process to allow taxpayers to map tax payments to indicate the specific liability and period to which the payment relates. Previously, taxpayers had limited options to select from when making payments, and as a result there were issues with payments being misallocated, leading to disputes over tax ledger balances and liabilities.

Additionally, the process for payment transfers and re-allocations from one tax head to another has been automated.

Simplified tax ledgers - The new portal comes with simplified tax ledgers to ease reconciliation and understanding of the ledger transactions and balances for both taxpayers and URA staff.  Also, the simplified ledgers accommodate the current tax amnesty for waiver of penalties and interest where the principal tax outstanding as at 30 June 2023 is paid by 31 December.

Pre-filled VAT returns – Perhaps the best innovation in this digital transformation is the introduction of pre-populated VAT returns. These returns will be web-based and auto-populated based on information from EFRIS.

Previously, taxpayers had to first download a blank excel VAT return template, complete it and then upload back to the URA portal.

Going forward, taxpayers will simply review the already populated VAT return, make necessary adjustments online; and submit the return to URA. This will first be effective for the November 2023 VAT return which is due on 15 December.

Rental tax returns – For persons with rental income, URA has updated the income tax return template to automate and standardise the rules around reporting rental income. Central to these changes is the restriction of allowable deductions against gross rental income.

For individuals and partners, the individual income tax return has been updated to have a separate schedule for rental income. No rental expenses are claimable.

For legal entities, the return has been updated to automatically restrict allowable rental expenses to 50% of the rental income. The rental expenses here include all rental expenses incurred in the current year, along with rental tax losses brought forward, interest and industrial building allowances.

More interestingly, URA intends to separate the rental income tax return from the standard income tax return effective 1 January 2024. As such, more changes are expected in this space.

Tax credit transfers – URA plans to introduce a new feature to allow taxpayers to transfer excess tax credits from one tax period to another period. Taxpayers need to watch out for this.

Local excise duty return – URA is also in the process of making changes to the local excise duty return. The updated return is expected to be available by the end of December 2023.

Overall, the various changes to the URA portal are expected to enhance taxpayers’ experience by automating, simplifying, and standardising processes while promoting transparency and efficiency in tax administration.

Like any process change however, system failures and delays are expected. It is therefore crucial for URA to manage stakeholder expectations, sensitise and train taxpayers on the various changes, while at the same time remaining open to feedback and being flexible and agile in handling system failures. I am happy to note that URA is already holding various taxpayer training sessions on the changes.

If you have not visited the URA portal in the last few days, I strongly encourage you to take some time to do this now and familiarise yourself with the various changes, especially ahead of the upcoming filing season this December. Don’t spoil your Christmas holiday by leaving this to the last minute. 

By Sophie Kayemba, Senior Manager - Tax, PwC Uganda