Last week former Uganda Revenue Authority (URA) commissioner Elly Rwakakooko sauntered into our news room to shoot the breeze about the good old days.
Rwakakooko had come in to set the record straight about his time at URA and what eventually led to his departure from the tax authority, which last week commemorated its 30 years of existence.
“I declined another term because I didn’t entire agree with the methodology being used to discipline people no paying tax,” Rwakakooko remembered.
At that time a paramilitary organisation, the Anti-Smuggling Unit (ASU) was constituted to clamp down on smugglers but also apprehend tax evaders.
“ASU was becoming a big military unit. I said no. I even closed their accounts. I even declared the group a security threat and refused them entrance into the URA offices.”
A look back into the papers then shows that there was real tension around the situation reported as a standoff been Rwakakooko and ASU boss Kale Kayihura.
"Rwakakooko, who says he initiated tax education of the public at URA, said it is counterproductive to try and collect taxes by force....
“If you don’t educate people about the value of taxes they have paid, they will revolt and then what will you do?”
He remembers a survey he did of 36 of the then 39 districts and documented cases of the killing of policemen following a nominal increase in the graduated tax rate.
“You can only enforce tax collection if the people broadly agree to pay tax.”
Rwakakooko who worked Canada, Kenya, was once the chairman of Uganda Commercial Bank and a lecturer at the Institute of Public Administration (IPA) now the Uganda Management Institute (UMI) says the challenge for URA remains the continued informality among business men.
He says up to 80 percent of all taxes collected comes from Kampala as if nothing is happening beyond the city’s suburbs.
The economy is becoming more formalised by the day he recognises, but he frowns at the slow pace of progress.
“This process needs to be supported politically we have no choice we need to raise more revenue urgently.”
Currently Uganda’s revenue to GDP, an important measure of whether enough tax is being raised in a country, stands at about 12.6 percent. Below the Sub-Saharan Africa average of 13.8 percent but way below Kenya or Mauritius where 18.4 and 19 percent of GDP is collected respectively.
He says there is one other thing let us down as a country.
“Strategic planning. If you do not engage in strategic planning you will have problems,” he said. We will be able to identify our priorities and tailor our expenditure with these expenditures in mind.
“Some politicians – not all, are too selfish. They don’t care about telling lies. We have to tell the truth. If a strategic plan is in place and people want a road and its not a priority tell them,” and he stopped at that.
"He rues that political expediency is dominating our actions, where more strategic thought should be applied...
Lest we forget Rwakakooko was also at the center of a very strategic question about twenty years ago.
“I opposed to privatisation. Not the principle but the methodology,” he recalls. At the height of the discussion he was the chairman of the committee on the national economy in the National Resistance Council (NRC).
HE argued then that if you opened the sale to foreigners who were better capitalised they would come in and drain out the lifeblood of the economy.
What did he propose?
“I wanted the UDC (Uganda Development Corporation) to take the lead.”
The argument against this at the time, was that we didn’t have the managerial capacity nor the capital to resuscitate these companies.
He acknowledges that management was a problem but that this could be contracted from abroad. As for the dearth of capital he says that was not true and if Ugandans were mobilised to take an equity stake in the companies that would not be a problem. More participation by Ugandans too would hold managements accountable.
“You see what is happening at Bugisu Cooperative Union (BCU). Once it is owned by Ugandans they will protect their interests.” But adds the proviso, “If you have the support of the center of course”.
The members of BCU have been fending off political interference in its operations recently.
"Does he think his analysis was vindicated at the time? “Oh yes! But my friends complain that the realisation has come too late. But you hear it people are calling for the revival of UDB to unlock some of the issues in the economy.”...
If he had his way he would resurrect the coffee and produce marketing boards as well as our textile industries as trigger for self-sufficiency.
“Nobody owes us a living. We have to do this ourselves.”
Our conversation come to an end. Maybe too soon. So what is he doing with himself now? HE wants to retire to his village and push community development. He is already involved with more than 128 cooperatives and ten cooperative unions working to unlock the full potential of the dairy and beef industries in southern Uganda.