The summation of tax collections by Uganda Revenue Authority (URA) for a period of nine months of the financial year 2021/2022 is confirmed to have hit Shs.15.4 trillion.
This figure is up by Shs. 1.4 trillion registered in the same period of the last financial year, according to statistics from the tax collection entity.
Though the figure is higher, it falls short of the set target which was Shs. 16.5 trillion. The failure to hit the target is blamed on the devastating effects of COVID-19 restrictions, which among others forced various entities like insurance companies to vote themselves out of existence.
However, authorities at URA are still optimistic, that the taxman agency will hit the set target, for instance, the commissioner general Mr.John Rujoki Musinguzi, said on May 9th, that the revenue agency has to collect an additional Shs5.9 trillion.
“We are optimistic that we shall meet this target,” said Musinguzi.
However, many tax experts like Mr. Henry Bazira of the Tax Justice Alliance Uganda cast doubt to this assertion, saying that the future performance of URA depends on the tax policy agenda of the government.
Mbazira noted that unnecessary tax holidays and other incentives, offered to the so-called foreign investors, weakens the capacity of the agency to collect a larger margin of taxes, necessary to hit its set target.
It should be noted that domestic revenue collections stood at Shs. 9.4 trillion in the FY 2021/22, against a target of Shs.10.6 trillion, according URA. This accounted for a growth of Shs. 816 billion (9.42%), as compared to the same period in FY2020/21.
A remarkable surplus was recorded in Pay As You Earn (PAYE) tax, which amounted to Shs. 248 billion in the nine months of the financial year 2021/22.
Other surpluses were also registered in casino tax at 14.70 billion, and tax on bank interest totalling Shs. 2 billion.
Deficits were mainly incurred in corporate tax at Shs. 200 billion, withholding Shs.142 billion, rental tax Shs.120 billion, while treasury bills stood at Shs.45 billion, according to statistics from URA.
The downturn was majorly attributed to the apocalyptic effects of COVID 19 barriers, that disrupted supply chains, leading to low aggregate demand in the economy and thus a reduction in profit prospects.
Direct domestic tax collections were to a greater extent boosted by PAYE, registering a growth of 15.50%, followed by corporation tax.
Note also has to be taken that indirect tax collections for the period July to March stood at Shs. 3.6 trillion. An immense growth of Shs.341 billion, accounting for 10.48% was realised, compared to the same period in the FY 2020/21, which stood at Shs. 398.4 billion.
Value Added Tax (VAT) collections stood at Shs. 2.3 trillion, registering a deficit of Shs. 504 billion and a performance of 82.59%, at tax head level. Improvements of Shs.224bn (10%) were realized.
In the beverages sector, URA performed as follows. Beer accounted for Shs.49. billion, spirits/waragi Shs.4.8 billion, while soft drinks Shs.43 billion. In the real estate sphere, a tax of Shs.43 billion was collected in the same financial year.
Meanwhile, the tax authority recorded a major surplus in phone talk time at Shs.4.3 billion, and internet data of Shs. 35 billion. The local excise duty tax collections were estimated at Shs.1.2 trillion, registering a downturn of Shs210 billion.
Other surpluses were marked in levy on mobile money withdrawals by Shs.30 billion, mobile money transfers Shs. 8 billion and sugar Shs7 billion.
Charges on Non-Tax Revenue collections like levies on driving licences and others were Shs.974 billion, against a target of Shs1.1 trillion, posting a shortfall of Shs.167 billion and a performance of 85%.
Foreign tax collections
International trade tax collections for the period the FY 2021/22 amounted to a grand total of Shs 6.2 trillion, against a target of Shs. 6.1 trillion, leading to a surplus of Shs.64 billion, and a performance of 101%.
Customs duty tax, that is charged on imported or exported goods grew by Shs.686 billion, accoubting for 1.2% in July to March of FY2021/22.
This excellent performance was mainly attributed to the growth in vatable goods (products on which Value Added Tax is charged) by 13% (Shs1.4 trillion) in the period July to March 2022, compared to the same period of last year.
The top five sectors, contributing to this excellent performance were retail and wholesale, the manufacturing sector, financial activities, ICT’s public administration and defense, all of which brought in 74% of the total revenue.
The tax collection agency also added a total of 538,275 new taxpayers to the taxpayer register in this financial year, bringing it to 2,321,828 tax payers.
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