Taxman exceeds half-year target by Shs322 billion

The Uganda Revenue Authority (URA) closed the first half of the 2024/25 financial year with a notable surplus of Shs322 billion, achieving a 102% performance rate.

Presenting the half-year revenue performance report for the period from July to December 2024 at URA Towers, Commissioner General Mr John Musinguzi Rujoki, attributed the milestone to Uganda's stable and resilient economic performance, enhanced administrative measures, and the cooperation of patriotic taxpayers.

Surpassing the target

For the 2024/25 financial year, URA was tasked with a net revenue target of Shs31.3 trillion. Of this, 48 percent (Shs14.9 trillion) was to be collected in the first half of the year, while the remaining 52 percent (Shs16.4 trillion) is set for collection between January and June 2025.

URA reported net revenue collections of Shs15.2 trillion against the half-year target of Shs14.9 trillion, registering a surplus of Shs322 billion. 

Compared to the same period in the previous financial year, this represents a Shs2.1 trillion growth (16 percent).

Strong performance in domestic revenue

Domestic tax collection continues to demonstrate strong growth, highlighting a shift from dependence on international trade taxes. Between July and December 2024, domestic revenue collection amounted to Shs10.1 trillion, surpassing the target of Shs9.8 trillion by Shs257 billion, achieving a 102 percent performance rate. 

This marks a growth of Shs1.3 trillion compared to the same period in the previous financial year.

Despite overall growth, international trade tax collections fell short by Shs28.2 billion, achieving a performance rate of 99.4 percent. However, the segment still recorded a significant revenue growth of Shs780 billion compared to the previous financial year.

URA’s surplus was driven by several factors, including enhanced administrative measures such as improved compliance, arrears collection, taxpayer training, and sensitisation.

The use of technology like the e-tax platforms such as the Electronic Fiscal Receipting and Invoicing System (EFRIS) contributed to better enforcement.

Increased field operations. These included compliance engagements, tax investigations, and intensified enforcement activities.

The use of alternative dispute resolution also played a significant role, allowing for the collection of Shs261 billion in principal tax, Shs2.73 billion in waived penalties, and Shs111 billion in interest as of December 31, 2024.

Growth in taxpayer base

Between July and December 2024, URA added 420,183 new taxpayers to its register, bringing the total to 4,881,983. The new taxpayers contributed Shs59 billion during the period. The growth in the register was attributed to simplified processes for acquiring Tax Identification Numbers (TINs), the use of third-party information, and intensified field operations.

Mr Godfrey Akena, the executive director at East African School of Taxation, highlighted the role of the income tax waiver under Section 47A of the Tax Procedures Code Act, which encouraged taxpayers to clear outstanding dues.

Mr Julius Mukunda, the executive director of the Civil Society Budget Advocacy Group (CSBAG), attributed the surplus to the enforcement of EFRIS and other e-tax platforms, which are starting to deliver results.

Enforcement operations

Country-wide enforcement operations during the first half of the financial year recovered Shs38 billion from 9,303 seizures, including 8,696 dutiable goods and 607 non-dutiable goods.

In December 2024, the legal services and board affairs department recorded collections of Shs86 billion, of which arbitration accounted for Shs55.25 billion. With the second half of the financial year underway, URA aims to collect Shs16.4 trillion to meet its annual target. The results so far underscore the effectiveness of URA’s strategies and the importance of continued compliance from taxpayers.

OUTLOOK

Collections

The net revenue collection target for the second half of FY 2024/25 is Shs16.4 trillion which represents a share of 52 percent of the annual target.