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URA collects Shs5.4trillion in first quarter of FY2022/23

But it reported revenue shortfall in withholding tax, temporary road license and export levy

| THE INDEPENDENT | Uganda Revenue Authority collected net revenue amounting to Shs5.4trillion against a target of Shs5.1trillion for the three months ending September 30, representing a Shs286billion surplus.

This represents a 105.58% improved performance and a revenue increase of Shs957billion (21.47%) compared to the same period in the previous financial year. The revenue agency is expected to collect Shs25.5trillion this financial year.

John R. Musinguzi, the commissioner general for URA said on Oct.27, domestic revenue net collections surpassed the target by Shs 135billion to Shs3.1trillion. Direct domestic taxes, too, registered a surplus of Shs37.49billion as non-tax revenue posted a surplus of Shs146.86billion. However, indirect domestic taxes posted a deficit of Shs51.41billion.

Other tax surpluses were registered in Pay As You Earn worth Shs85.89billion, casino tax (Shs17.34 billion), corporate tax (Shs14.99 billion), tax on bank interest (Shs4.69billion) and rental tax (Shs1.46billion).

On the other hand, slight shortfalls were recorded in withholding (Shs63.29 billion), VAT (Shs41.28billion), local excise duty – LED – (Shs 10.13 billion) and treasury bills (Shs 7.51 billion).

Musinguzi said, the shortfall in withholding tax is partly attributed to reduced budget releases for various government entities for the first quarter of this year and thus unable to pay some of their suppliers.

“We also observed increased capital expenditure due to capital investments among our clients as a result of improved economic performance,” Musinguzi said.

“Furthermore, the high inflation, which has risen from 6.8% in June 2022 to 10% by the end of September 2022, has resulted in an increase in the cost of doing business, and, thus, high input costs. This has had an impact on taxpayer VAT revenue realised during the period under review,” he added.

International trade tax collections

International trade net taxes stood at 2,239.83 billion against a target of Shs2, 088.50billion, resulting in a surplus of Shs151.33billion. This represents a 107.25% performance.

The major surpluses were registered in; import duty (Shs52.59billion), VAT on imports (Shs49.14 billion), petroleum duty (Shs45.70 billion), surcharge on imports (Shs6.63 billion), excise duty (Shs3.34 billion) and infrastructure levy (Shs 0.30 billion).

However, shortfalls were incurred in; withholding tax (Shs3.43billion), temporary road license (Shs2.43 billion) and export levy (Shs0.61billion).

There were increase in fuel import volumes by 88.41 million litres (18.06%) compared to the same period last financial year. This is attributed to increase in volumes of petrol by 71.56 million litres (33.34%) and kerosene by 2.20 million litres (20.73%).

However, diesel import volumes reduced by 5.80 million litres (2.39%) which was insignificant to revenue collection hence a surplus of Shs45.70billion in petroleum duty.

There was also an increase in tax yield from top imported items during the period under review compared to the same period last financial year. These include; persons motor vehicles (Shs27.73billion), palm oil (Shs25.80billion), wheat (Shs21.79billion), worn clothing by Shs20.55billion), polyether’s by (Shs11.30 billion), polymers by (Shs10.62billion), motorcycles (Shs8.53 billion), petroleum oils by (Shs8.16billion), plastic footwear by (Shs8.04billion) and hot rolled iron/non-alloy steel by (Shs7.59billion).

Going forward, Musinguzi said, URA hopes to collect Shs6.6trillion, accounting for 26.37% of the annual target driven by continued roll out of EFRIS and DTS, taxpayer education prorammes and sensitization, intensified surveillance at porous borders, roll out of  automated Integrated Warehousing Information Management System and  stakeholder collaboration and engagements.

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