Monday March 31 2014

Revenue authority registers more than Shs200 billion shortfall


With a few months left to end the financial year, the tax prefect seems to be struggling to recover a shortfall of Shs270b.
If the situation does not change by June when the financial year ends, that would mean that the national budget will have to be realigned at the expense of other priorities.

“Our shortfall is about Shs270b. But, compared to the same period the previous financial year, our (revenue) collection is much higher,” the commissioner customs, Mr Richard Kamajugo said while releasing the performance last week in Kampala.

Although taxes collected from Customs (international trade taxes) and domestic taxes grew compared to the same period last year, it was not enough to significantly reduce the cumulative deficit of Shs270b.
The month of February has registered the least shortfall.

“In February 2014, net revenue collected was Shs644 billion. This represents a growth of 11 per cent (Shs68 billion) compared to February 2013 and a performance rate of 99 per cent,” Mr Kamajugo said.
February performance is attributed to Uganda Revenue Authority (URA) enforcement actions that resulted into collection of Shs9b arrears from oil exploration sub-sector, increased remittances resulting from bonus and gratuity payment, especially from the oil exploration and communication sectors.

Taxes accrued from products such as beer, cement, soft drinks and mobile money transfers, explain the encouraging February performance.
Increased production in beverage industry, taxes from the electricity sector and revenue from rental income and presumptive tax, and partnership URA formed with Uganda Registration Service Bureau and Kampala City Council Authority to register small businesses to broaden the tax base, further boosted February performance.

But taxes from corporate companies and corporations were not forthcoming as they succumbed to losses. It was also noted that clearance of petroleum products under the EAC Single Customs Territory clearance procedures has enhanced revenue collected from the product.

Also, an increase in the value of dutiable goods and the rise of value of goods that attract taxes levied on imported goods boosted the performance registered in February.

During the period July 2013 to February 2014, net revenue collected was Shs5.1trillion, an increase of 13 per cent (Shs608billion) compared to Shs4.5billion collected in the period of July 2012 to February 2013.
The performance rate during this period was 95 per cent