URA seeks Shs 18bn for rent despite Shs 140bn Nakawa headquarters

2026-03-27 - 14:35

The Uganda Revenue Authority (URA) is facing parliamentary scrutiny over continued expenditure on office rent, seven years after constructing its Nakawa headquarters at a cost of about Shs 140 billion. The concerns emerged on Wednesday during a session of Parliament’s committee on Finance, Planning and Economic Development, chaired by Amos Kankunda, as URA officials presented their ministerial policy statement for the 2026/27 financial year. Lawmakers questioned the tax body’s plan to spend about Shs 18 billion annually on office space at Pearl Tower, despite owning the 22-storey URA Tower in Nakawa, which was commissioned in 2019 to consolidate operations and reduce rental costs. Mukono District Woman MP Hanifah Nabukeera questioned the logic of renting additional space while owning a purpose-built headquarters. Kira Municipality MP Ibrahim Ssemujju Nganda also criticised the move, saying the Nakawa tower was expected to eliminate rental expenses. “We thought the Nakawa tower would end rent. Instead, URA is among the first to occupy new private buildings. Are you a conduit for landlords?” Ssemujju asked. URA officials defended the decision, citing space limitations at the Nakawa headquarters. Commissioner for Customs Abel Kagumire told the committee that the building accommodates fewer than 2,000 staff, while URA’s workforce currently stands at about 4,942 employees, necessitating additional office space. Before 2015, URA operated from multiple rented offices across Kampala, incurring high recurrent costs. The construction of the Nakawa headquarters was intended to consolidate offices, reduce rent and improve operational efficiency. The scrutiny came despite URA reporting a strong revenue performance. The authority collected Shs 31.643 trillion against a target of Shs 31.369 trillion, achieving 100.84 per cent and registering a surplus of Shs 264.87 billion. Domestic taxes contributed Shs 21.252 trillion, while international trade taxes generated Shs 11.105 trillion, both recording growth of more than 15 per cent. However, MPs warned that headline growth masks structural weaknesses, particularly Uganda’s low tax-to-GDP ratio, which remains between 13 and 15 per cent, below the sub-Saharan Africa average of 16 to 18 per cent. “You report a widening tax base, yet public dissatisfaction is growing. Are these registered taxpayers actually contributing?” asked committee member Keefa Kiwanuka. Lawmakers also scrutinised several high-expenditure items in URA’s proposed budget, including Shs 23 billion for welfare and entertainment, Shs 13.5 billion for workshops and seminars, Shs 18 billion for staff training, and Shs 69 billion for ICT infrastructure and services. Ssemujju described the spending pattern as excessive. “You spend billions on training, workshops and entertainment. Who exactly benefits from this?” he asked. MPs further demanded clarity on medical expenditure and ICT allocations, which they said had previously attracted audit queries. Legislators also expressed concern that domestic taxes are growing more slowly than international trade taxes, despite government investments in wealth creation programmes such as the Parish Development Model, Emyooga, Youth Livelihood Programme and Operation Wealth Creation. Sheema Municipality MP Dicksons Kateshumbwa warned that second-quarter growth of about 8 per cent was below expectations. “With trillions invested in household income programmes, consumption, and therefore VAT, should be rising. What explains the slowdown?” he asked, also pointing to declining PAYE filing ratios as a sign of compliance gaps. Tororo North MP Geoffrey Ekanya linked weak revenue performance to structural inefficiencies, including infrastructure bottlenecks. “You cannot separate revenue from infrastructure. Traffic congestion and border delays reduce productivity and ultimately tax collections,” he said. MPs also questioned the absence of external financing to URA, asking whether development partners had scaled back support. URA’s budget is projected to decline from Shs 901.184 billion in the 2025/26 financial year to Shs 877.396 billion in 2026/27, including Shs 400.258 billion for wages, Shs 412.350 billion for non-wage expenditure and Shs 64.788 billion for capital development. The authority is targeting Shs 41.513 trillion in revenue in the next financial year, in line with government’s domestic revenue mobilisation strategy and the National Development Plan IV.