Wholesale, retail trade highest sources of taxes
Wholesale and retail trade lead other tax sub-sets in terms of tax contribution. PHOTO | FILE
What you need to know:
- The low tax collections are a result of a number of factors, among which include the spike in commodity prices, which started in November last year as well slow recovery in the economy that has been further dampened by the current runaway commodity prices.
Wholesale and retail trade contributed the largest portion of taxable revenue in the nine months ending March, according to data from Uganda Revenue Authority (URA).
During the period, according to the URA Revenue Performance Report for July to March in the 2021/22 financial year, wholesale and retail trade contributed 29 percent or Shs4.6 trillion of the Shs15.4 trillion total tax collections.
This was followed by manufacturing, which contributed 23 percent (Ssh3.6 trillion), while financial activities, excluding insurance contributed 9.9 percent (Shs1.5 trillion).
Information and communication contributed 7.8 percent (Shs1.2 trillion) while public administration and defense contributed 4 per cent (Shs637 billion).
However, the report indicated that with just two months left to close the financial year, URA will have to dig deep to meet its revenue target that are behind target by Shs1.1 trillion.
The report also indicates that actual net revenue collections were more than Shs15.4 trillion, but less than the Shs16.5 trillion target.
“As we race towards the end of this financial year in June 2022, we have to collect Shs5.9 trillion. We are optimistic that we shall meet this target,” URA Commissioner General John Musinguzi, said yesterday in Kampala while releasing the third quarter revenue performance results.
During the period, domestic tax collections stood at Shs9.4 trillion against a target of 10.6 trillion, while international trade tax exceeded targets, fetching Shs6.2 trillion against a target of Shs6.1 trillion.
This, URA said, resulted from growth in customs tax collections, which increased to Shs686b and an increase in fuel volumes, which grew to 17.49 million litres compared to the same period in the 2021.
During the period, data indicates, fuel imports registered increases with petrol imports rising by 0.5 percent (3.89 million litres), while jet fuel and kerosene rose by 53.8 percent (31.73 million litres) and 33.20 percent (10.53 million litres), respectively.
Majority of the tax sub-sectors recorded positive growth throughout the period, however, significant declines in revenues were registered in the electricity sub-sector, gas, steam and air conditioning, which declined by 25 percent.
Revenue from construction and real estate declined by 10 percent and 3 percent, respectively due to a slow recovery in the two sectors.
