By Marvin Ocol
Uganda Revenue Authority has collected 10 trillion shillings during a period between July and December 2021.
The taxman was given a revenue target, by the Ministry of Finance, Planning and Economic Development, of Shs 22,363.51 trillion which is 16.10% (UGX 3,100.51) higher than the actual revenue collection from the
last financial year. As a result, in the last six months URA projected to collect 49.47% representing UGX 11,063.90 billion, an increase of 16.80% (UGX 1,591.43 billion) from the realised revenue for the same period last financial year.
The net revenue collections for the first 6 months of this FY 2021/22 were UGX 10,163.09 billion against a target of UGX 11,063.90 billion, representing 45.44% of the annual target. A shortfall of UGX 900.81 billion was incurred with a performance of 91.86%.
During the period July to December FY 2021/22, 75.46% of the revenue was generated from the top 5 sectors. These are:
- The wholesale and retail trade sector which had the most significant
contribution, amounting to UGX 3,031.01 billion (29.41%).
- The manufacturing sector followed with a contribution of UGX 2,413.36
- The financial activity sector contributed UGX 1,064.43 billion (10.33%)
4. The information and communication sector contributed UGX 880.97
- Public Administration contributed 3.75%
According to the URA Commissioner General John Musinguzi, the revenue growth in the Wholesale and etail trade sector is attributed to the wholesale of solid, liquid and gaseous fuels and related products. Musinguzi attributes growth of revenue from financial activities is attributed to contributions by mobile commerce due to gazetted regulations by Bank of Uganda’s directive to all telecom companies to separate financial services from telecom services.
During the same period, there was a decline in revenue collection from the following sectots, in comparison to FY 2020/21;
- Information and communication declined by 14.55%
- Electricity, gas, steam and air conditioning supply by 37.79%
- Real estate activities by 10.78%
- Construction sector by 14.06%
The decline is attributed to a slow down in business in these sectors resulting
from the COVID-19 pandemic impact.
In this period, domestic tax revenue collections were UGX 6,229.62 billion against a target of UGX 7,180.94 billion, registering a shortfall of UGX 951.32 billion, and performance of 86.75%. The shortfalls were from direct domestic taxes (UGX 273.61 billion), indirect domestic taxes (UGX 487.20 billion) and Non Tax Revenue (NTR) (UGX 190.51 billion). 20.03% of the domestic tax shortfall was from Non-Tax Revenue (NTR).
International trade taxes
Customs tax collections in the first 6 months of the FY 2021/22 were UGX 4,076.18 billion against a target of UGX 4,102.51 billion, posting a shortfall of UGX 26.33 billion, and performance of 99.36%. However, a year to year growth of UGX 389.78 billion (10.57%) was realized this year compared to the same period in the previous Financial year 2020/21.
Direct Domestic Taxes performance
Direct domestic tax collections in the first half of FY 2021/22, (July – December
2021) were UGX 3,376.74 billion against a target of UGX 3650.35 billion and a
deficit of UGX 273.61 billion, posting a performance of 92.5%. As a result, the
direct tax collections for the period grew by UGX 62.09 billion (1.87%), compared
to the same period in the FY 2020/21. In addition, there were surpluses
registered in PAYE (UGX 156.45 billion), casino tax (UGX 8.84 billion) and tax
on bank interest (UGX 1.63 billion).
Indirect Domestic Taxes
Indirect tax collections for the period July to December 2021 were UGX 2,296.38 billion against a target of UGX 2,783.58 billion, registering a performance of 82.50% and a shortfall of UGX 487.2 billion. As a result, a growth of UGX 137.12 billion (6.35%) is noted compared to the same period in the FY 2020/21.
Value Added Tax Performance
Cumulatively, during the period July to December, VAT worth UGX 1,518.71 billion was collected against a target of UGX 1,874.11 billion registering a performance of 81.04% and a shortfall of UGX 355.40 billion. As a result, a growth of UGX 75.23 billion (5.21%) was registered compared to the same period in the previous Financial year.
Local Excise Duty Performance (LED)
LED worth UGX 777.67 billion was collected against a target of UGX 909.46 billion hence a performance of 85.51% and a shortfall of UGX 131.79 billion.
However, a growth of UGX 61.89 billion (8.65%) was registered compared to the same period in 2020.
Significant surpluses were realized in the levy on mobile money withdrawals (UGX 11.96 billion), sugar (UGX 7.27 billion) and mobile money transfers (UGX 6.74 billion).
Performance of Non-Tax Revenue
The Non-Tax Revenue (NTR), including Appropriation in Aid (AIA), collected was UGX 556.50 billion against a target of UGX 747.01 billion, posting a deficit of UGX 190.51 billion and a performance of 74.50%. NTR contributed UGX 369.69 billion with a performance of 93.74%, while AIA contributed UGX 186.80 billion with a performance of 52.98%.
International trade taxes performance (Customs)
In the period July to December 2021, Customs collected revenue worth UGX 4,076.18 billion against a target of UGX 4,102.51 billion posting a performance of 99.36% and a deficit of UGX 26.33 billion. However, a year to year growth of UGX 389.78 billion (10.57%) was realized in July to December 2021 compared to July to December 2020.
In addition, significant surpluses were recorded in VAT on imports by UGX 155.05 billion, petroleum duty by UGX 8.73 billion, a surcharge on imports by UGX 6.06 billion and excise duty by UGX 0.38 billion. However, a significant shortfall was registered in; import duty worth UGX 101.37 billion, withholding
tax by UGX 20.64 billion, temporary road licenses by UGX 9.69 billion, infrastructure levy by UGX 7.16 billion and export levy worth UGX 57.67 billion.
It was observed that all tax heads registered positive growth rates except for withholding taxes on imports that reduced by 20.17% and surcharge on used imports by 6.1% during the period July to December FY 2021/22 compared to last F/Y.
Tax Register expansion
During the period of July to December of the FY 2021/22, 182,553 new taxpayers were added to the taxpayer register. As a result, as of the end of December 2021, the taxpayer register had 1,966,106 taxpayers. Of these, 150,849 were non-individuals, and 1,815,257 were individual taxpayers.
This represents a growth of 10.24% against a targeted growth of 7.50%. Of those new taxpayers, in the last six months (first half of the FY 2021/22), at least 33,341 of them became value taxpayers, from whom UGX 13.12 billion was generated.