By David Mugabe

REVENUE collections grew by 19% in the first five months of this financial year compared with the same period last year, but still fell short of the Government’s target, the Uganda Revenue Authority has said.

Collections between July and November 2009 were sh1,586b against a target of sh1,638b, according to a URA report released yesterday.

“This good performance is attributed to major surpluses that were recorded by corporation tax, tax on bank interest, withholding tax and VAT during this period,” the authority said.

It said there had been a significant increase in corporation tax returns from companies in the wholesale and retail, transport and manufacturing sectors.

VAT remittances also increased from companies that had expanded, mainly in the beer, telecom and electricity supply sectors, according to the report.

In addition, URA said, there was an increase in sales of excisable products such as beers, cement, bottled water and soft drinks.

The sale of bottled water went up by 74% compared to last year while the consumption of soft drinks rose by 24%. Fuel volumes grew by 17%.

URA boss Allen Kagina attributed the shortfall for the period July to November to the appreciation of the shilling to the dollar.

They had projected the exchange rate to be sh2,270 but it turned out to be sh2,062. This, she noted, resulted in an estimated revenue loss of sh57b.
The best performance was recorded in the month of July, where a surplus of sh22b was posted, and the worst in October where there was a shortfall of sh49b.

For November, a shortfall was recorded of sh24b. URA collected a total of sh304b against a target of sh328b.

Kagina said there was a remarkable decline in the value of taxable imports in November. The tax body will know by the third quarter whether it will be able to meet its annual target.

Compared to the rest of the region, Uganda recorded the highest growth in tax revenues in the period July to November compared to the same period last year – 19%.

Kenya’s revenues grew by 12%; Tanzania’s by 5% and Rwanda’s declined by 1.4%.

However, Uganda’s shortfall is higher than that of its neighbours. Rwanda surpassed its target, while Kenya reached 98% of its target. Uganda is at 96.8%.