The International Centre for Tax and Development is currently funding a research project on compliance management of individuals with high income and wealth - a project which aims to design a tax administration process that brings HNWIs into the tax bracket, as this is an area that continues to be a challenge in Africa.
The taxation of High Net Worth Individuals (HNWIs) has recently gained traction in many taxing authorities for various reasons (OECD 2009).
First and foremost, these individuals often engage in complex commercial transactions. Second, they contribute (or have the potential to contribute) significantly to total tax revenue. Third, given their vast amounts of income and wealth, they are more likely to engage in aggressive tax planning schemes. Lastly, the compliance behaviour of this group of taxpayers is bound to have a bearing on the integrity of the tax system as a whole.
Specifically, the study is aimed at:
(i) Defining, categorizing and identifying HNWIs in Uganda;
(ii) Establishing a threshold that distinguishes these individuals from other taxpayers;
(iii) Developing a comprehensive compliance behavior monitoring plan for this group of taxpayers.
Our central research question is: how can the Uganda Revenue Authority more effectively tax HNWIs?
The specific questions are:
i) How should HNWIs be defined for purposes of Uganda?
ii) What are the income and wealth sources of Uganda’s HNWIs?
iii) What mechanisms should be put in place to facilitate the inclusion of this group of taxpayers into the tax net?
The answers to these questions are important for:
i) Increasing revenue collections;
ii) Developing a better understanding of the affairs of this group of taxpayers specifically and aggressive tax planning generally;
iii) Developing policies and tax administration measures aimed at bringing HNWIs into the tax net.
The research team comprises:
- Dr Jalia Kangave, who has served in many roles as a researcher including with the UNRISD and was Principal of the school and Director of Research at the East African School of Taxation in Uganda. Her work revolves around policy analysis and advisory services on tax issues.
- Uganda Revenue Authority Joint Compliance Committee. The URA team consists of Ronald Waiswa (Masters in Statistics, Makerere University), Patrick Lumala (Masters in Statistics, Makerere University) and Susan Nakato (Masters in Economic Policy and Management, Makerere University).
The first phase of the project will run until late summer 2015, after which an ICTD Working paper will be produced.