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URA collects sh3.86 trillion
Publish Date: Feb 09, 2014
URA collects sh3.86 trillion
Allen Kagina, URA commissioner general
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By John Odyek

Uganda Revenue Authority (URA) has recorded the lowest tax collection in the first half of this year posing concerns about funding government programs.


URA has recorded a tax deficit of sh246.93b for the first half of 2013/14, this is the lowest figure registered in the last five years according to Allen Kagina, URA commissioner general. URA collected sh3.86 trillion by end of December 2013 against sh4.11 trillion target set.

Economic experts have voiced concerns therefore about the challenges to funding the national budget. The experts said with the poor performance of the economy it is doubtful how much more revenue URA can collect from many distressed businesses and individuals some of whom feel they are overtaxed.

Kagina attributed the low revenue collections to the decline in economic growth which affected sectors like manufacturing, hotels and trade. She said the high inflation reduced expenditures by individuals and business. A poor performance in the exchange rate caused a revenue loss in international trade taxes.

“There is hope that during the second half of the year, revenue performance will improve as investment expenditure trickles down to businesses and security in South Sudan is restored,” Kagina said.

Kagina explained that many companies that were previously posting profits declared smaller profits or losses citing slowdown in the economy and low access to affordable credit. She mentioned that 325 companies that posted profis in 2011/1w registered losses in 2012/13 which had an impact on corporation tax performance in the first half of 2013/14.

She also criticized banks for shifting to investing in treasury bills due to the lower risks this poses as compared to giving out loans. “The banking sector was affected by a reduction in the industry loan books and the interest earned which translates into low taxable income,” she said.

Mohammed Ssempijja, a tax expert with Ernst & Young said government should address problems that make doing businesses hard in Uganda. Ssempijja said some of these problems include high interest rates, low stock of infrastructure, bureaucracies in licensing, difficulties in accessing utilities like water, electricity.

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