February 21, 2013

URA in 28Billion shillings Surplus

URA Commissioner General Allen Kagina
URA Commissioner General Allen Kagina

An increase in the number of people buying mobile phone airtime and taking beer during the festive season has resulted into a surplus revenue collection of 28 billion shillings in January, according to Uganda Revenue Authority (URA).
The revenue authority says that a total of 620 billion shillings was collected, above the targeted amount of 591 billion shillings last month.
Sarah Banage, the Assistant Commissioner in charge of Public and Corporate Affairs at URA, said the performance improved by 21 percent representing 110 billion shillings if compared to the amount they collected in January 2012.
Banage attributed the increased collection of the domestic taxes to among other things the increased electricity power capacity arising from the commissioning of Nyagak and Nzizi power stations, which produce 3.5 and 50 mega Watts of power respectively. She added that government had also reduced subsidies to the electricity sector and increased compliance and payment of outstanding arrears in the electricity sub sector further helped boost the performance.
She said the power generation had increased the number of people with access to electricity and consequently boosted the base on which Value Added Tax is imposed.
Besides the electricity sub sector was the increased consumption of telephone talk time by consumers. According to URA, the sector registered a 4.3 billion shillings surplus representing a growth rate of 23 percent compared to the sales made in 2011. The telecom performance has been attributed to increased sales of airtime during the festive season.

Other surplus contributions came from the spirits and beer industry that registered a 1.4 billion shillings extra revenue. Banage explained that the industry sold 1,627,779 litres of spirits in December 2012 compared to 615,248 litres in December 2011.
The various sectors ensured a domestic tax collection of 366 billion shillings compared to a target of 329 billion shillings indicating a surplus of 37 billion shillings, which represents a growth of 39 percent against the performance of the same period last year.

However, while the domestic sector had an impressive performance, the international scene posted deficits. The Authority set a target of 277 billion shillings but collected only 269 billion shillings.

Banage attributed the shortfall to decline in petroleum duty and Value Added Tax on imports. She said they would continue to identify and prosecute firms that are not complying with their tax obligations.

Faced with recent withdraw of funding from donor countries, Uganda is hoping to boost its revenue performance to help sustain its budget.

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