URA makes surplus collections in first half of 2020/2021

Kampala, Uganda | THE INDEPENDENT | Uganda Revenue Authority has hit above the revenue collections target set by the Ministry of Finance, Planning and Economic Development for the first half of the year 2020/2021.

The ministry had initially told URA to collect Shs 21.6 trillion for the year, but after evaluating the possible effects of the coronavirus (COVID-19) pandemic, the target was reduced to 19.7 trillion.

As expected, the period April, May and June saw the biggest slump in revenue collections as sections of the economies were shut down under preventive pandemic containment measures.

Nonetheless, URA says they saw signs of recovery and improvement from July to November 2020, with growth in revenue collections to Shs 8.7 Trillion as of 29th, December.

URA says the total values will be released after the half year closes. Since February to November, the number of taxpayers filing for VAT has dropped by about 15%, while those for Pay as You Earn (PAYE) fell by a quarter.

The authority says imports have also been recovering steadily from the April-June slump and in September, the highest growth was recorded at 46.5%. Uganda’s exports slumped in March to April 2020, but have been growing steadily since then.

In the COVID-19 period Feb-Nov 2020, imports from the top 5 countries declined with the exception of Tanzania and India, with goods from China, the biggest source of imports declining by 19.95%, followed by Japan and Kenya.

According to data at URA, since February, a total of Shs 571.26 billion in arrears has been recovered after the authority launched new measures to enhance compliance and enforcement.

Over the last six months, domestic revenue collections have posted steady growth, at 2.5% per month, while the highest growths were in September and November at 9.9% and 7.4% respectively. There were declines in collection for August and October.

In April, customs revenues dropped by almost half compared to April of 2019, as international trade, mainly imports were affected by the closure of borders.

However, between July and December, revenues have registered signs of recovery with a growth of collections above the set target for the period.

URA Commissioner General, John Musinguzi Rujoki says the good collections might not represent a recovery in the revenue sector, forecasting that the pandemic’s long term impacts on taxpayers and the economy as a whole are yet to be felt.

Rujoki says that the environment since March has prompted them into innovating to overcome the bottlenecks that hampered their operations.

Between February and November 2020, 92,578 new taxpayers have been registered showing a growth of 6%.

The authority is encouraging voluntary disclosure where a taxpayer avoids possible penalties and interest, a move that has seen them recover Shs 17 billion.

Other measures include the digital tracking solutions that ensure local products and imports are tracked for tax purposes. But they will also use an integrated data system which will see different government departments and agencies enable URA collect data on water, electricity and lands to locate taxpayers and taxable activities.

The main contributing sections to the surplus were increasing in mobile phone communications, increased production of spirits especially due to demand by makers of hand sanitisers, increased sales of building materials like cement as more infrastructure projects were implemented.

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URN