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Taxes: URA witnesses shortfalls in beer, spirits, internet data as taxman collects slightly above 15 trillion

By Davis Mugabi

Uganda Revenue Authority (URA) Tuesday announced revenue collection of Shs 15 trillion.

URA Commissioner General John Musinguzi told the media that during the period July to March, the actual net revenue collections were UGX 15,466.68 billion representing 69.16% of the annual target. This is a significant growth in revenue of UGX 1,490.41 billion (10.66%) was registered in July to March FY 2021/22 compared to the same period in the FY 2020/21.

However, the outturn for the period was short of the target of UGX 16,532.43 billion by
UGX 1,065.75 billion.

Figures show that Domestic revenue collections in the first nine months of the FY 2021/22 were UGX 9,484.62 billion against a target of UGX 10,670.32 billion, registering a growth of UGX 816.22 billion (9.42%) as compared to the same period in FY 020/21. However, the collections were below the target by UGX 1,185.70 billion.

The direct domestic tax collections were UGX 4,907.64 billion, posting a performance of
94.17%. The direct tax collections for the period grew by UGX 273.94 billion (5.91%), compared to the same period in the FY 2020/21.

Major surpluses were registered in PAYE (UGX 248.65 billion), casino tax (UGX 14.70
billion) and tax on bank interest (UGX 1.84 billion) while shortfalls were mainly incurred in corporate tax (UGX 200.81 billion), withholding (UGX 142.35 billion), rental tax (UGX
120.29 billion), and treasury bills (UGX 45.14 billion) majorly due to COVID 19 restrictions
that led to supply chain disruptions, low aggregate demand in the economy and thus
reduced profitability. PAYE contributed the most to direct domestic taxes collections
registering a growth of 15.50%, followed by Corporation tax.

The Indirect tax collections for the period July to March were UGX 3,602.86 billion. A
growth of UGX 341.90 billion (10.48%) was realised compared to the same period in the
FY 2020/21.

At tax head level, VAT collections were UGX 2,394.10 billion registering a shortfall of UGX
504.72 billion and a performance of 82.59%. A growth of UGX 224.78 billion (10.36 percent) was realized. The taxman witnessed under performance in the Construction
sector by UGX 74.83 billion, Beer UGX 49.39 billion, spirits/waragi UGX 48.38, soft drinks UGX 43.72 billion and Real Estate activities UGX 43.13 billion.

However, URA registered a major surplus in Phone talk time at UGX 43.63 billion.

The Local Excise Duty (LED) collections were UGX 1,208.77 billion registering a shortfall of UGX 210.15 billion, a performance of 85.19% and a growth of UGX 117.12 billion (10.73%). The Authority, however, witnessed shortfalls in beer by UGX 50.59 billion, spirits by UGX52.11 billion and internet data by UGX 35.54 billion.

Figures note that URA registered surpluses in levy on mobile money withdrawals by UGX 29.79 billion, mobile money transfers UGX 8.21 billion and sugar UGX 7.48 billion.

International trade tax collections for the period July to March 2022 were UGX 6,255.93
billion against a target of UGX 6,191.44 billion, posting a surplus of UGX 64.49 billion,
and a performance of 101.04%. Customs tax collections grew by UGX 686.82 billion
(12.33%) in July to March of FY 2021/22, in comparison to the same period last year. The
performance was mainly attributed to growth in vatable goods by 13.78%(UGX 1,432.55
billion) in period July to March 2022 compared to the same period last year. And increase in fuel volumes by 1.05%(17.49 million litres) compared to July to March 2021. This was due to the increase in petrol imports by 0.5%(3.89 million litres), jet fuel by 53.80%(31.73 million litres), and Kerosene by 33.20%(10.53 million litres).

With only two months to close the FY 2021-22, URA recognizes that because of the impact of COVID 19, businesses have not fully picked.

However, the Authority says that it is doing all “we can within our means to support businesses to remain afloat so that they are able to contribute revenue.”

According to CG Musinguzi, race towards the end of this financial year in June 2022 in on.

“We have to collect UGX5.9 Trillion and we are optimistic that we shall meet this target. I call upon all Ugandans to collaborate with us as we develop Uganda together,” Musinguzi said.

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