Domestic Revenue Mobilization for Development Activity Quarterly Report 2ND Quarter: January 1, 2021 to March 31, 2021

The project commenced on January 21, 2020, and runs through January 20, 2025, with Nathan Associates Inc. as the prime implementing partner and Cardno Emerging Markets USA, Ltd, as a subcontractor. The activity is comprised of three components: Strengthening Tax Policy, Improving National and Sub-national Revenue Administration, and Enhancing Public-Private Dialogue. Component 1, Strengthening Tax Policy, is designed to equip the Ministry of Finance, Planning, and Economic Development (MoFPED), the Uganda Revenue Authority (URA), and other policymakers with the tools and skills to conduct policy analysis, evaluate, and communicate the impact of tax and non-tax revenue reforms. This component has made significant progress, including the completion of a diagnostic review and rewrite of the VAT Act, and the submission of a draft of a new VAT law to MoFPED for discussion. Component 2, Improving National and Sub-national Revenue Administration and Compliance, is focused on enhancing voluntary taxpayer compliance by strengthening taxpayer education, registration, data analysis, and arrears management. This component has also made significant progress, including a comprehensive review of URA's HR organizational structure, policies, procedures, and integrity reform drive, as well as an audit of URA's IT systems. Component 3, Enhancing Public-Private Dialogue, is designed to build capacity within the private sector and civil society to participate in and influence tax policy reforms and contribute to an informed dialogue on taxation. This component has also made significant progress, including the completion of a contextual study on the Political Economy Analysis (PEA) and the Gender Youth and Social Inclusion (GYSI) study. During the reporting period, DRM4D completed three contextual studies, including the baseline study, the PEA, and the GYSI study. These studies provide a useful background and context that informs the approach to the rest of the interventions. Several activities are taking place under each component, and a few have been completed. Under Component 1, DRM4D continued to work with counterparts in MoFPED on the reform of the primary tax laws, the DTA framework, the excise, environmental, and gaming tax regime, as well as the tax policy training program. The activity has also made significant progress in terms of capacity development, with module one of the tax policy training program completed and attended by 42 government officials. Under Component 2, DRM4D undertook a comprehensive review of URA's HR organizational structure, policies, procedures, and integrity reform drive, as well as an audit of URA's IT systems. DRM4D also worked with the URA's Learning and Development division to scope the level of capacity building required. The activity has also made significant progress in terms of public-private dialogue, with the completion of a contextual study on the PEA and the GYSI study. These studies provide a useful background and context that informs the approach to the rest of the interventions. The activity has also made significant progress in terms of taxpayer education, registration, data analysis, and arrears management. Overall, the Domestic Revenue Mobilization for Development Activity has made significant progress in its first year, with all three components making significant strides in terms of policy reform, capacity development, and public-private dialogue. The activity is well-positioned to achieve its objectives and contribute to the sustainable increase of domestic revenue mobilization in Uganda.