By Moses Oketayot
This Financial Year 2022/23 (July 2022 to June 2023), URA is expected to collect Ugx25.1t out of the national budget of Ugx49.9t. But as we report this, the taxman in the last six months has only collected Ugx11.6t which represents 46.6% of the total allocation.
Speaking to the media on Tuesday at the Half Year tax performance report, URA Commissioner John Musinguzi Rujoki said that out of the target of Ugx11.7t from the period July to December 2022, only Ugx11.6t was collected, indicating a shortfall of Ugx94.8b
“Whereas there was a slight shortfall of Ugx94.80b, the general performance was 99.19%. This performance also shows a substantial growth in revenue of Ugx1.5t (14.83%) compared to the same period last Financial Year 2021/22,” Musinguzi said.
Gross Domestic revenue collections from July – December 2022 were Ugx7.47t against a target of Ugx7.45t, resulting in a slight surplus of Ugx19.32t.
This according to the Commissioner General represents a performance of 100.26% and subsequently, a growth of Ugx1.2t (19.91%) compared to the same period last Financial Year of 2021/22.
Direct domestic taxes registered a surplus of Ugx84.74t, Non-tax revenue posted a surplus of Ugx171.08t while indirect domestic taxes posted a shortfall of Ugx236.50b.
Major surpluses were registered in PAYE (UGX 225.85 billion), casino tax (UGX 29.33 billion), rental tax (Ugx17.06b) and tax on bank interest (Ugx8.80b).
On the other hand, shortfalls were incurred in withholding (Ugx63.78b), Corporate tax (Ugx59.08b), and treasury bills (Ugx39.31b).
Musinguzi attributes the PAYE to growth in the wage bill witnessed by companies whose PAYE increased due to increased staff numbers and arrear management recovery initiatives. Bonus and gratuity payments by some companies to their staff also resulted into extra PAYE.
The operational teams’ intensive compliance focused field activities which included constant taxpayer engagements and education, enforcement of Electronic Fiscal Receipting and Invoicing Solution (EFRIS) and Digital Tax Stamps (DTS) which supported timely and improved accuracy in the declaration for VAT and LED.
Increase in Rental income tax is attributed to enhanced compliance initiatives such as deployment of the Rental Tax Compliance System, intensified field inspections and close monitoring of the arrears rental portfolio. Also, this sector is recovering as companies are increasing the supply of prime office space due to the economy’s full operationalization and people returning from the arrangement of working from home.
The Non-Tax Revenue performance is attributed to enforcement on payment of arrears for express police penalties and increase in demand for government services such as business registration, work permits and tourist visas among others.
The shortfall in Withholding tax is partly due to reduced budget releases for the various Government entities for Quarter one and Quarter two, preventing them from paying some of their suppliers.
In customes, gross tnternational taxes collections from July – December 2022 were Ugx4,453t against a target of Ugx4.563t, representing a performance of 97.59%.
Whereas the customs tax collections were Ugx110.10b below the target, there was a realized growth in revenue of Ugx377.73b (9.27%) compared to the same period last financial year.
Surpluses were registered in; import duty (UGX 23.75 billion), surcharge on imports (Ugx1.06b) and temporary road license (Ugx16.10b).
However, shortfalls against the target were registered in the following tax heads:Petroleum duty by Ugx69.80b, excise duty by Ugx21.95b),VAT on imports by Ugx42.89b, withholding tax by Ugx8.80b, infrastructure levy by Ugx5.68b, and export levy by Ugx1.90b.
Uganda’s imports amounted to Ugx15.1t posting a growth of 19.04% Ugx2.4t compared to the same period last financial year.
The top imported items that registered an increase were gold, palm oil, medicaments, wheat/meslin, persons motor vehicles, polymers, polyethers, motorcycles, insecticides, worn clothing and rolled iron/non-alloy steel among others.
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 among others.
The top five sources of Uganda’s imports were China, India, Kenya, Zimbabwe and Japan.
Uganda’s exports to the rest of the world amounted to UGX 4,235.74 billion. This was an increase of 7.13% (UGX 281.75 billion) 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, other residue Viner sheets among others.
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 5-leading destinations for Uganda’s exports were South Sudan, Italy, DRC, Kenya, and Germany.
Uganda’s re-exports to the rest of the world amounted to Ugx735.15b. This is an increment of 8.99% (Ugx60.62b compared to same period last financial year.
The top re-exported items were; palm oil, bulldozers, goods motor vehicle, persons motor vehicles, wheat/meslin, bread/pasty cakes, tractors, prepared tomatoes and petroleum oils among others.
With just under four months to conclude financial year 2022/23, it remains to be seen whether the Authority will hit the Ugx25.1t, having collected only 46.6% of the total target.
The taxman now has the uphill task to collect Ugx13.3t which represents 53.22% of the total allocation by the ministry of finance of Ugx22.1t.
In FY2021/22, URA saw a net revenue collection of Ugx21.6t, indicating a shortfall of Ugx704b against a target of Ugx22.3t