Govt fiscal operations were less expansionary in four months – BoU
Bank of Uganda headquarters in Kampala, Uganda. PHOTO/FILE
What you need to know:
- During the first four months of this fiscal year which ends on June 30 2023, the Central Bank said in the state of the economy report which it released on December 30 2022 that total government expenditure in the period amounted to Shs11.065 trillion, which was Shs1.598 trillion lower than programmed mainly due to underperformance in development expenditure of Shs1.941 trillion.
The state of the economy report for December 2022 by the Central Bank has revealed that in the four months of FY22/23, fiscal operations were less expansionary than programmed, reflecting in part tightening financial conditions and the need to support the disinflation objective of monetary policy.
During the first four months of this fiscal year which ends on June 30 2023, the Central Bank said in the state of the economy report which it released on December 30 2022 that total government expenditure in the period amounted to Shs11.065 trillion, which was Shs1.598 trillion lower than programmed mainly due to underperformance in development expenditure of Shs1.941 trillion.
“Although there was an 18.6 per cent growth in domestic revenue collections when compared to the previous year, government revenue (including grants) amounted to Shs7.658 trillion, which was below the budget target by Shs217.7 billion,” said the Central Bank
The central bank said during the period, grants amounted to Shs482.1 billion, registering a shortfall of Shs354.5 billion. The resultant fiscal deficit amounted to Shs3.406 trillion which was much higher than the programmed deficit of Shs1.380 trillion.
The Central Bank explained that in relation to the Uganda Revenue Authority (URA) targets, the cumulative outturns for net tax and Non-Tax (NTR) collections for the four months of FY22/23 amounted to Shs7.182 trillion which was Shs142.9 billion above the target underpinned by over performance in taxes on international trade.
“Net URA tax revenue amounted to Shs6.689 trillion and NTR amounted to Shs492.7 billion, corresponding to an overperformance of Shs100.6 and Shs.42.3 billion, respectively,” said the Central Bank.
However, the Central Bank report indicates that indirect taxes underperformed by Shs78.9 billion largely due to a Shs46.5 billion shortfall in VAT while international trade taxes were above target by Shs113.8 billion largely because of the overperformance of import duty and VAT on imports.
“Direct taxes also overperformed by Shs82.6 billion mainly due to higher than target collections in PAYE. On an annual basis, net tax revenue registered a growth of 16.9 per cent in the four months of FY22/23 compared to 9.2 in the same period last year while NTR increased by 51.3 per cent in the period compared to 13.7 in the previous year,” the central bank explained.
