Only 20% of Uganda’s 5.25 Million Registered Taxpayers Are Active – Audit

Kampala — Uganda’s Auditor General has raised concerns over the effectiveness of the country’s tax register, revealing that only about 20% of registered taxpayers are active, despite a sharp expansion in registrations in the financial year ended June 30, 2025.

According to the Auditor General’s report to Parliament of Uganda, the Uganda Revenue Authority added 728,640 new taxpayers to its register in FY2024/25, bringing the total number of registered taxpayers to 5,251,874. However, the report notes that only a fraction of these taxpayers are filing returns and contributing revenue.

The Auditor General observed that while URA invested heavily in growing the register through the Tax Register Expansion Programme (TREP), several high-potential taxpayer clusters remain either non-compliant or entirely outside the tax net.

Professionals flagged as major gap

The report highlights significant non-compliance among professional service providers, who are legally barred from using the presumptive tax regime under Section 4(8) of the Income Tax Act, Cap 338, and are therefore expected to file standard income tax returns.

Among practising accountants, the Auditor General found that out of 289 accountants registered with the Institute of Certified Public Accountants of Uganda, only 104 were compliant and had filed up-to-date tax returns. A sampled group of 10 accountants showed that while some were registered with URA, several had never filed returns or had filings that were not up to date.

A similar trend was noted among practising advocates. Out of 1,271 advocates registered with the Uganda Law Society, only 292 were compliant with up-to-date income tax returns. The audit found that 249 advocates were registered with URA but had not filed current returns, while 61 could not be traced on the e-tax system, suggesting they may not be registered at all.

The Auditor General noted that comparable compliance gaps were evident in other sectors, including education, health and engineering, pointing to broader structural weaknesses in enforcement rather than isolated lapses.

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Untapped revenue potential

“These cases imply that there are still untapped areas that URA has not leveraged to effectively and efficiently collect revenue,” the Auditor General said, warning that headline growth in taxpayer numbers is not translating into meaningful revenue mobilisation.

In response, the Accounting Officer explained that government has amended the Tax Procedures Code Act (TPCA) to tighten enforcement. Under Section 4(9) of the TPCA, possession of a Taxpayer Identification Number (TIN) is now mandatory before licensing by any regulatory authority.

URA management said the authority has been guided to update the tax register, clean up inactive accounts and enforce compliance, particularly among professionals regulated by statutory bodies.

However, the Auditor General said legislative changes alone are insufficient without active enforcement, and advised the PS/ST to institute concrete measures to ensure URA fully enforces the amended law.