The tax authority collected Shs11.6tn in the six months, recording a Shs95bn shortfall
Kampala, Uganda | JULIUS BUSINGE | Uganda Revenue Authority collected Shs11.6trillion against the target of Shs11.7tn for the first six months of the financial year 2022/23 – representing 46.4% of the annual target.
URA’s Commissioner General John Rujoki Musinguzi said despite failing to hit the target, performance shows a substantial growth in revenue of Shs1.5tn (14.83%) compared to the same period last year.
“We are doing all we can as URA to support businesses, listening to their plight and responding with appropriate interventions as we push for greater tax compliance,” Rujoki said.
URA is expected to collect Shs25.1tn out of the national budget of Shs 49.9tn for this financial year that ends on June.30.
Domestic vs international taxes
For the period July – December 2022, gross domestic revenue collections were Shs7.4tn against a target of Shs7.4tn, resulting in a slight surplus of Shs19.3bn. This represents a performance of 100.26% and subsequently, a growth of Shs1.2tn (19.91%) compared to the same period last Financial Year of 2021/22.
Direct domestic taxes registered a surplus of Shs84.74bn; non-tax revenue posted a surplus of Shs171bn while indirect domestic taxes posted a shortfall of Shs236bn.
Major surpluses were registered in PAYE (Shs225.85bn), casino tax (Shs29.33bn), rental tax (Shs17.06bn) and tax on bank interest (Shs8.80bn).
Meanwhile, shortfalls were recorded in withholding (Shs63.78 billion), corporate tax (Shs59.08bn), and treasury bills (Shs39.31bn).
Rujoki said domestic tax performance was supported by among other factors, the PAYE performance due to growth in the wage bill witnessed by companies – whose PAYE increased due to increased staff numbers and arrear management recovery initiatives; the operational teams’ intensive compliance focused field activities and increased rental income tax.
The Non-Tax revenue performance is attributed to enforcement on payment of arrears for express police penalties and increase in demand for government services.
The shortfall in withholding tax is partly due to reduced budget releases for the various government entities for quarter one and quarter two of the financial year.
On the other hand, gross international taxes collections from July – December 2022 stood at Shs 4.4tn against a target of Shs4.5tn, representing a performance of 97.59%.
Whereas the customs tax collections were Shs110bn below the target, there was a realised growth in revenue of Shs377bn (9.27%) compared to the same period last financial year.
However, surpluses were registered in import duty amounting to Shs23.75 billion, the surcharge on imports (Shs1.06billion) and temporary road license (Shs16billion).
The good performance of import duty is attributed to an increase in imports of goods that attract import duty. The surcharge on imports was due to the increase in tax paid by key imported items like; personal motor vehicles. The performance of petroleum duty was affected by a reduction in diesel and kerosene fuel import volumes.
Other shortfalls in international trade tax collections were due to major decreases in the tax yield registered in imported goods like; goods motor vehicles, Portland cement, new pneumatic tyres, beet sugar, a flat rolled product of alloy steel, iron/steel bars and un-denatured ethyl alcohol.
Imports vs exports
During the reporting period, Uganda’s imports amounted to Shs15tn posting a growth of 19.04% (Shs2.4trillion) compared to the same period last financial year. The top imported items that registered an increase were gold, palm oil, medicaments, wheat, personal motor vehicles, polymers, polyether’s, motorcycles, insecticides, worn clothing and rolled iron/non-alloy steel.
Noticeable reductions in imports were in vaccines, Portland cement, goods motor vehicle, rice, sorting machinery, the flat rolled product of alloy steel, new pneumatic tyres, and other footwear.
The top five sources of Uganda’s imports were China, India, Kenya, Zimbabwe and Japan.
On the other hand, the country’s exports to the rest of the world amounted to Shs4.2trillion- representing an increase of 7.13% (Shs281billion) compared to the same period last financial year. This significant growth of exports was due to improved economic recovery from the COVID-19 pandemic.
The top exported items were; coffee, tea, beet sugar, iron/steel bars, wheat/meslin, salted/dry fish, mineral waters, other manufactured tobacco, grain sorghum, brans/sharps, and other residue Viner sheets.
A decrease in exports was registered in fish fillets, mushrooms, cocoa beans, milk and cream, rolled iron/non-alloy steel, dried leguminous vegetables, articles of plastics and beauty make-up.
The five leading destinations for Uganda’s exports were South Sudan, Italy, DRC, Kenya, and Germany.
Rujoki said, by the end of the reporting period, the taxpayer register had 3,067,983 taxpayers – of these, 180,486 were non-individuals and 2,887,497 were individual taxpayers.
Going forward, the revenue target for the second half of the financial year is Shs13.3tn, which accounts for 53.22% of the annual target of Ugx25.1tn.
Rujoki said the remaining half of the year will see the tax body enhance taxpayer education and sensitisation, use of technology and data, and engage with stakeholders in addition to skilling staff to achieve the set target.