How URA posted Ugx286b revenue surplus in FY2022/23 first Quarter
By Moses Oketayot
The Ministry Finance, Planning and Economic Development allocated a revenue target of Ugx25.5b to Uganda Revenue Authority in the financial year 2022/23 (July 2022 to June 2023) including non-tax revenue.
Speaking on Thursday to journalists from the headquarters in Nakawa, the URA Commissioner General John Musinguzi revealed that during the first quarter of the current financial year (July to September 2022), the tax man was able to collect Ugx5.4t against the target of Ugx5.1t, resulting into a Ugx286.4b surplus, which represents a 105.58% improved performance.
The surplus highlights an increase in revenue of Ugx957.80b (21.47%) compared to the same period in the previous financial year (July to September 2021)
Musinguzi attributed the improved revenue collection to a number of factors which include pay as you earn (PAYE) surplus of Ugx85.89b due to growth in the wage bill witnessed by companies whose PAYE increased due to increased staff numbers.
Other areas that had surplus include casino tax (Ugx17.34b), corporate tax (Ugx14.99b, tax on bank interest (Ugx4.69b) and rental tax (Ugx1.46b).
In the customs department, there was growth in dry import value: The import value of dry cargo increased by 28.42% (Ugx1.7t) particularly vatable goods imports and dutiable goods imports. This translated into more revenue collected and partly explaining the cumulative surplus of Ugx151.24b in international trade tax collections, partly because the economy is recovering, and businesses are picking up.
The slight drop in pump prices of fuel has also been attributed to increase in fuel import volumes by 88.41 million litres (18.06%) compared to the same period last financial year. This is majorly explained by the 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 UGX 45.70 billion 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 (Ugx27.73b), palm oil (Ugx25.80b), wheat/meslin (Ugx21.79b), worn clothing by (Ugx20.5b), polyether’s by (Ugx11.30b), polymers by (Ugx10.62b), motorcycles (Ugx8.53b), petroleum oils by (Ugx8.16b), plastic footwear by (Ugx8.04b) and hot rolled iron/non-alloy steel by (Ugx7.59b).
The increase in domestic taxes was also attributed to the operational teams’ intensive focused field activities, stakeholder management and improved tax compliance support.
He however, attributes the shortfall in withholding tax partly to reduced budget releases for the various government entities for quarter one, preventing them from paying some of their suppliers.
“We observed increased capital expenditure due to capital investments among our clients as a result of improved economic performance. 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,” Musinguzi added.
147,892 new taxpayers were added to the taxpayer register during the period under review, representing a growth of 5.65%. As at the end of September 2022, the taxpayer register had 2,765,900 taxpayers. Of these, 174,020 are non-individuals, and 2,591,880 are individual taxpayers.
“The registration performance is attributed to key initiatives like Tax Education and sensitisation, Taxpayer Register Expansion Program (TREP), Data analysis from third-party data, stakeholder engagements and using the Tujenge bus to reach our taxpayers,” Musinguzi noted.
During the same period, URA won 40 cases in total with 28 civil, 6 criminal, 6 withdrawals in the Authority’s favour, 4 cases ruled against them, and there was no split decision with Ugx26.98b collected.
In the tax investigation department, 32 cases were completed and revenue worth Ugx45b recovered by the Authority.
Musinguzi concluded that collected the Ugx25.55t is an uphill task, but the taxman is confident that the goal is attainable with the help of every tax payer, and economic player.
Moses Kaggwa who represented the Permanent Secretary and Secretary to the Treasury from the Ministry of Finance, Planning and Economic development, attributed the increased inflation (10%) to global trends like imported inflation, war in Ukraine, and the recent decision by OPEC to cut down production of oil output by two billion litres a day, climate change in the world, and rising inflation in the whole world.
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