Kampala, Uganda | THE INDEPENDENT | The Commissioner-General of Uganda Revenue Authority, Doris Akol has said that the 20.4 trillion shillings revenue target for the current financial year 2019/2020 is unrealistic.
Akol was on Tuesday appearing before Members of Parliament to explain their financial proposals under the 2020/2021 financial year Budget Framework paper.
She highlighted a number of challenges faced by the tax body among which included the unregulated informal sector which affects expansion of the revenue base, gross under declaration of rental income and inadequate funding to support structural review, skills enhancement and reach in critical areas, for example, Ooil, gas and telecoms.
Parliament appropriated a revenue target of 20.4 trillion for the current financial year 2019/2020 up from the previous 2018/2019 collections of 16.6 trillion. Out of the appropriated 20.4 trillion targets, URA had by December 2019 collected 9.2 trillion against the half-year target of 9.7 trillion.
Tasked by the Finance Committee Chairperson Henry Musasizi on why the targets were unable to be attained which created a deficit of Shillings 500 billion, Akol said that the medium-term expenditure framework for the current financial year projected a target of Shillings 18.3 trillion and not 20.4 trillion.
She blamed the Ministry of Finance for continuously communicating revised targets to the tax collector that increases pressure on URA to meet the new targets. She says the second budget call circular revised the 18.3 trillion target to 19.7 trillion and finally a target of 20.3 trillion was communicated in July last year.
She insists that the target for this financial year should ideally be 18.3 trillion Shillings and any amount above that figure is unrealistic. She says the initial projection is the one that is properly arrived at in the targeting process.
Akol says the target was revised because there are new expenditure requirements at the Finance Ministry which have to be financed through revenue collections and yet in her view, the revenue collections cannot meet this additional expenditure.
Musasizi has now summoned the minister of finance to appear before the committee on Tuesday next week in order to give more insight into the matter.
Meanwhile, government intends to collect Shillings 21.54 trillion in domestic revenue in the 2020/2021 financial year to finance the proposed Shillings 39.64 trillion election-year budget.
This is slightly lower than the Shillings 40.48 trillion, budget for this financial year.