Uganda Revenue Authority (URA) registered a revenue collection shortfall of sh556.9b for the 2017/18 financial year which has just ended.
Government had in the 2017/18 budget had a revenue collection target of 15.063trillion but the tax body was able to collect sh14.5trillion, according to the revenue collection performance report from the ministry of finance.
The biggest deficit of sh475b came from the poor performance of revenue collection for indirect domestic taxes. URA collected a total of sh3.1trillion against the projected target of sh3.6trillion.
For the last three financial years, URA has been registering huge sums of deficits from the projected revenue collections which has been attributed to the poor performance of the economy.
There is good news however that revenue collection has generally increased by sh1.6trillion from sh12.9trillion collected in the 2016/17 financial year to sh14.5trillion which has been collected in 2017/18.
In 2017/18, URA was given an extra sh86b which was aimed at strengthening the capacity of the body to be able to effectively execute its mandate.
Parliament approved the extra allocation to URA on the understanding that strengthening the capacity of the institution would enable it collect more taxes.
The key sectors which experienced higher revenue growth within include real estate with 34.7% growth rate, construction (22.7%), social services (20.4%), information and communication (18.5%), and the water sector which registered a revenue growth of 16.6%.
Asked recently to explain the factors behind the revenue collection growth, Akol attributed it to strengthened controls, continued compliance initiatives, continuous fighting of smuggling, and enhanced arrears enforcement mechanisms.
Explaining strengthened controls, Akol said, “We have done this through the operationalisation of the One stop boarders, centralised document processing centre and single customs territory that have led to speedy clearance at borders, reduced documentation by 70% and enhanced reconciliation and tracking of goods enabled by real time sharing of data between revenue authorities and port authorities.”
URA registered impressive in revenue growth from VAT on imports which reached sh2.4trillion against the target of sh2.2trillion.
There has also been a surplus of sh38.39b from the 30% corporate tax paid by registered business companies as a portion of the profits they make. The total revenue collection registered is sh884.8b which is way above the projected target of sh846.4b.
For the 2018/19 financial year, government has set an ambitious target of collecting a total of sh16.4trillion partly because of the various new taxes that have been introduced.