Feb revenue collections up sh310b
Mar 24, 2009
UGANDA Revenue Authority (URA) has registered a 22.65% pick up in revenue collections amounting to sh310.10b in February, compared to the same period last year.
By Sylvia Juuko
UGANDA Revenue Authority (URA) has registered a 22.65% pick up in revenue collections amounting to sh310.10b in February, compared to the same period last year.
The improvements in returns were mainly with withholding tax, Pay As You Earn (PAYE) and tax on bank interest. Allen Kagina, the commissioner general, told journalists last week that this represented a surplus of sh19.43b against a targeted sh290.67b.
“We have been posting revenue shortfalls since July 2008 except for the month of October. However, we are beginning to see the trend go up and we hope we can sustain the performance,†she said.
She noted that due to the challenges facing the business community, corporation, income, rental income and casino taxes underperformed in February.
Kagina predicted that with a slowdown in economic growth to an average of 6-7%, revenue performance would go down.
“Average corporate profitability is slowing down. Consumers are reviewing their consumption behaviour and banks are strengthening controls in the financial sector and the shilling is depreciating. All these aspects have an effect on revenue performance,†she said.
She was cautiously optimistic that with the improved performance and strengthening in collection of arrears, there was a possibility of reducing the revenue deficit recorded in the first half of the year.
“We will do everything to wipe out the deficit but it’s a tall order,†she acknowledged. The shilling has depreciated to 2,040/2,045 per dollar in the inter-bank market last Tuesday, from sh1,965/1,975 at the beginning of the month. This is expected to impact on revenue collections.
According to Kagina, indirect domestic tax registered a shortfall of sh10.30b undermined by deficits in Value Added Tax (VAT). “Items responsible for the shortfall were VAT on services, breweries and cement. For excise duty, soft drinks and cement again underperformed,†she added.
However, excise on telecommunications posted a surplus. Consumption taxes have been underperforming since the beginning of the year due to an increase in importation.
“When you import, you pay VAT. But when you sell or transact, you get a refund on VAT. This explains the underperformance of VAT,†she said.
International trade taxes registered good performance with a surplus of sh21.67b, which is a performance of 113.74% “However, fuel taxes underperformed because there were reduced volumes in the month of February. So we have a shortfall of sh33b,†said Kagina. She said URA would continue strengthening controls and at the same time sensitise the public to increase tax compliance.
The revenue body posted a deficit of sh108b in revenue collection during the first half of the financial year 2008/2009 as the impact of the global economic recession began being felt in the economy.
Kagina said the tax body had not registered any default rates during this period. She, however, said because some companies laid off workers, the revenue body anticipated a downturn in PAYE.
UGANDA Revenue Authority (URA) has registered a 22.65% pick up in revenue collections amounting to sh310.10b in February, compared to the same period last year.
The improvements in returns were mainly with withholding tax, Pay As You Earn (PAYE) and tax on bank interest. Allen Kagina, the commissioner general, told journalists last week that this represented a surplus of sh19.43b against a targeted sh290.67b.
“We have been posting revenue shortfalls since July 2008 except for the month of October. However, we are beginning to see the trend go up and we hope we can sustain the performance,†she said.
She noted that due to the challenges facing the business community, corporation, income, rental income and casino taxes underperformed in February.
Kagina predicted that with a slowdown in economic growth to an average of 6-7%, revenue performance would go down.
“Average corporate profitability is slowing down. Consumers are reviewing their consumption behaviour and banks are strengthening controls in the financial sector and the shilling is depreciating. All these aspects have an effect on revenue performance,†she said.
She was cautiously optimistic that with the improved performance and strengthening in collection of arrears, there was a possibility of reducing the revenue deficit recorded in the first half of the year.
“We will do everything to wipe out the deficit but it’s a tall order,†she acknowledged. The shilling has depreciated to 2,040/2,045 per dollar in the inter-bank market last Tuesday, from sh1,965/1,975 at the beginning of the month. This is expected to impact on revenue collections.
According to Kagina, indirect domestic tax registered a shortfall of sh10.30b undermined by deficits in Value Added Tax (VAT). “Items responsible for the shortfall were VAT on services, breweries and cement. For excise duty, soft drinks and cement again underperformed,†she added.
However, excise on telecommunications posted a surplus. Consumption taxes have been underperforming since the beginning of the year due to an increase in importation.
“When you import, you pay VAT. But when you sell or transact, you get a refund on VAT. This explains the underperformance of VAT,†she said.
International trade taxes registered good performance with a surplus of sh21.67b, which is a performance of 113.74% “However, fuel taxes underperformed because there were reduced volumes in the month of February. So we have a shortfall of sh33b,†said Kagina. She said URA would continue strengthening controls and at the same time sensitise the public to increase tax compliance.
The revenue body posted a deficit of sh108b in revenue collection during the first half of the financial year 2008/2009 as the impact of the global economic recession began being felt in the economy.
Kagina said the tax body had not registered any default rates during this period. She, however, said because some companies laid off workers, the revenue body anticipated a downturn in PAYE.