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URA warns of UGX 4.3 Trillion revenue losses due to budget shortfalls

URA team led by Commissioner General John Musinguzi shared with members of parliament performance and revenue mobilization initiatives in the Ministerial Policy statement for the FY 2022/23. Photo via @URA_CG

Kampala, Uganda | THE INDEPENDENT | Uganda Revenue Authority (URA) officials have told Members of Parliament that 4.3 trillion Shillings projected revenue is to be foregone due to different unfunded interventions in the coming financial year 2022/2023.

Led by John Musinguzi, the Commissioner General, officials from URA on Monday appeared before Parliament’s Finance Committee to present their policy statement for next financial year.

According to the budget documents before the committee, URA has been allocated 521.43 billion Shillings against its budget requirement of 726.65 billion, hence a funding gap of 205.2 billion.

While presenting the proposed national budget framework paper to Parliament recently, the Minister of State for Finance in charge of Planning, Amos Lugoloobi said that the government is targeting a total revenue collection of 25.54 trillion Shillings to partly finance the 47.2 trillion budget.

Now in his statement to the committee, Musinguzi said that due to the different interventions for which no funding has been appropriated, projected revenue amounting to 4.35 trillion is to be foregone.

He highlighted a 12.73 billion funding gap on tax education, research and strategic engagements and that failure to implement this would result into a loss of 1.844 billion. Musinguzi also said that 46 billion expected revenue is to be foregone due to a funding gap of 10.54 billion towards the Non Intrusive Inspection of Goods at entry points and Surveillance of wider coverage of porous borders.

MPs also learnt that the absence of funding totaling 27.5 billion towards office accommodation in different customs and enforcement stations will lead to a loss of 1.11 trillion Shillings expected revenue. Musinguzi also said that another 1.34 trillion expected revenue is to be foregone due to a funding gap of 35 billion towards the construction of the tax academy.

However, a section of MPs led by Butambala County representative, Muhammad Muwanga Kivumbi asked URA officials to explain how the allocation of 205 billion would lead to the collection of 4.3 trillion.

Kivumbi wondered how feasible this would be given that in the past, parliament supported different initiatives from URA but they have failed to increase the tax collections.

Paul Omara, the Otuke County MP also tasked URA to explain how the funding will contribute to the increment in tax revenue. He also wondered whether the 4.3 trillion that is expected to be foregone in revenue is part of the bigger 25 trillion targeted revenue for the coming financial year.

In response, Musinguzi said that apart from the tax academy construction that could take several years, all the other interventions proposed by URA have an immediate impact on the country’s revenue collection.

Amos Lugoloobi, the Minister of State for Planning said that government is constrained and cannot fund only one area of the economy.

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URN

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