Research consultancy

INFORMATION SYSTEMS AND THE PERFORMANCE OF GOVERNMENT PARASTATALS IN UGANDA: A CASE OF UGANDA REVENUE AUTHORITY
By Oketcho Wilbroad

Abstract

This study examined the effect of Information Systems (IS) on the performance of government parastatals in Uganda, with a specific focus on the Uganda Revenue Authority (URA). It evaluated the influence of information systems software, infrastructure, and user knowledge and skills on URA’s organizational performance. A cross-sectional survey design was used, applying both qualitative and quantitative data collection and analysis methods. A sample of 181 URA employees and 100 key taxpayers participated in the study. Findings indicated a significant positive relationship between all three IS components and URA performance. The study recommends countrywide training seminars for taxpayers on IS tools like ASYCUDA World, improved internet infrastructure, and development of user-friendly software to enhance accessibility and performance.

1. Introduction

Governments globally are investing heavily in Information Systems (IS) to enhance service delivery, efficiency, and financial performance. In Uganda, the government, through the Uganda Revenue Authority (URA), has adopted IS to improve revenue collection, taxpayer service, and organizational effectiveness. This study aimed to assess how IS—particularly software systems, infrastructure, and user competency—affect URA’s performance, measured by financial output, customer satisfaction, and institutional growth.

2. Background

2.1 Historical Perspective

IS development traces back to the 1890s with the U.S. Census tabulator and has evolved through multiple technological phases, including personal computers and internet-based enterprise systems. In Uganda, computerization began in 1967 but only gained significant government traction after the Ministry of ICT was formed in 2006. URA has since implemented systems like ASYCUDA World to modernize operations and improve tax compliance.

2.2 Theoretical Foundation

The study was grounded in Rogers’ (1962) Diffusion of Innovation Theory, which posits that organizational change is driven by innovation, communication, time, and social structures. URA’s adoption of IS reflects a deliberate move to address inefficiencies through accessible and reliable digital systems.

2.3 Conceptual Overview

IS is understood here as an integrated framework involving software, hardware, and human skillsets aimed at enhancing organizational processes. The study considered software applications (e.g., e-tax systems), infrastructure (e.g., networks, servers), and user competency (e.g., digital literacy) as the independent variables influencing organizational performance.

2.4 Contextual Background

URA, tasked with domestic revenue mobilization, has implemented IS since 2003, notably adopting ASYCUDA World in 2011. Despite these initiatives, URA has frequently fallen short of revenue targets. Between 2015 and 2018, URA faced consistent revenue deficits despite significant investment in IS, suggesting potential gaps in system implementation or user engagement.

3. Problem Statement

Despite major investments in IS at URA, performance challenges persist—characterized by low staff productivity, customer dissatisfaction, and unmet revenue targets. These issues suggest that the IS systems in place may not be fully optimized or effectively utilized, prompting the need to assess their actual impact on performance.

4. Objectives

To assess the effect of IS software on URA’s performance.
To examine the impact of IS infrastructure on URA’s performance.
To investigate how user knowledge and skills influence URA’s performance.

5. Methodology

A cross-sectional design was used, combining qualitative and quantitative data collection methods. The study surveyed 181 URA employees and 100 prominent taxpayers. Instruments included questionnaires, interviews, and document reviews. Data were analyzed using SPSS, applying Spearman’s correlation and regression analysis. Reliability and validity were ensured through pre-testing and Cronbach’s Alpha (average α = 0.77).

6. Key Findings

IS Software: Strongly correlated with improved performance through automation of services, reduction in manual errors, and improved transaction turnaround.
IS Infrastructure: Critical in enabling continuous service delivery (e.g., 24/7 customs processing), but performance depends on internet reliability and hardware availability.
User Knowledge & Skills: Essential for both internal staff and taxpayers; limited digital literacy was found to hinder full utilization of IS platforms.

7. Recommendations

Training: URA should organize nationwide training seminars to enhance IS use, especially for taxpayers interacting with systems like e-TIN and ASYCUDA World.
Infrastructure: URA should partner with reliable internet service providers to enhance infrastructure capacity.
Software Development: Emphasis should be placed on user-friendly IS tools tailored for a wide user base, including those with limited IT skills.

8. Conclusion

Information Systems significantly influence the performance of government parastatals like URA. However, the impact is moderated by infrastructure quality and user competence. Addressing the technical and human resource gaps will be key to fully realizing the benefits of IS in enhancing public sector performance in Uganda.