• Fri. Sep 30th, 2022

UGANDA, Kampala | Real Muloodi News | Revenue deficit of USh499 billion results from under performance of domestic taxes. Uganda Revenue Authority (URA) expected domestic tax collections to reach the USh3 trillion threshold for this period.

However, URA only collected USh2.6 trillion, representing a revenue deficit of USh440 billion. Although customs collections registered an 8.85 per cent growth, they posted a revenue deficit of USh106 billion.

Value added tax registered a deficit of USh223 billion while Local Excise Duty posted a shortfall of USh77 billion. Corporate tax registered deficits of USh24 billion and Rental income fell by USh19 billion. International trade tax also showed a shortfall because of deficits registered by Petroleum Duty of USh43.34 billion, import duty USh68.27 billion and withholding tax USh135.8 billion.

In the first quarter of 2021, a period between July- September, URA expected a collection of USh4.9 trillion, but they could only collect USh4.4 trillion. Despite being less than the expectation, it represents a 9.57 per cent growth in revenue collection when compared to the financial year 2020/2021.

URA credits the increase in revenue collection to administrative initiatives, including management of arrears, which allowed a recovery of revenue amounting to nearly USh322 billion.

John Musinguzi Rujoki, URA Commissioner General while addressing the media at URA headquarters in Nakawa at the release of the revenue performance report for the quarter end September, said 9.57 per cent expansion in revenues showed a recovery of the economy that had slowed down in this period because of the adverse effects of the pandemic.

The report indicated that 74 per cent of the revenue was being generated from five sectors, including wholesale and retail trade that contributes USh1.3 trillion (30.1 per cent), manufacturing which contributes USh 1 trillion (23.6 per cent), financial activities collection of USh353 billion (7.82 per cent), Information and Communications Technology which contributes USh338 billion (2.65 per cent) and public administration with a collection of USh202 billion (4.49 per cent).

A trend analysis for the last five years shows a continuous growth in net revenue collections with the highest year-to-year growth of 17.82 per cent seen in the financial year 2018/2019 and the lowest growth of 1.62 per cent in 2020/2021 financial year mainly due to the adverse impact of Covid-19.

Mr Musinguzi reveals that, “there are signs of economic recovery as portrayed by a growth in revenue of 9.57 per cent.”

Remittance of USh7.22 billion arrears in arts, entertainment and recreation led to a 97 per cent growth. Water supply, sewerage, waste management and remediation activities also benefited from payment of arrears, growing by 6.4 per cent to USh9.62 billion. The mining and quarrying grew by 41 per cent mainly due to remittances from court settlements from oil and gas activities.

Sectors such as electricity, gas, steam and air conditioning registered a decline in this period with revenues falling by 17 per cent while construction revenues fell by 15 per cent and real estate registered a revenue decline of 4.6 per cent.

The report explained this decline as resulting from continued government restriction on some sectors which affects the supply chains leading to disruption of industries like restaurants, hotels, events and institutions operating below capacity.

In the remaining period of the 2021/2022 financial year, URA will seek to collect USh17.4 trillion, which is 77 per cent of the annual target of USh22.3 trillion.

Mr Musinguzi says they will achieve this through interventions such as alternative dispute resolution, voluntary compliance and embarking on a service-centric approach. Strengthening of Digital Tax Stamps and Electronic Fiscal Devices will also complement their endeavour.

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