Tax body, Uganda Revenue Authority (URA) has reported that it exceeded its target for revenue collections for the concluded 2018/19 financial year by Shs 258bn.
Revenue collections grew by 14 percent to Shs 16.6 trillion in the year under review, compared to 2017/18. The average net revenue collections growth over the last five year period was at 15.72 percent while the tax to GDP ratio has increased from 12.84 recent in the 2014/15 financial year to 15.11 percent in the last financial year.
This is above the National Development Plan (NDP) II target for 2018/19 of 14.9 percent.
The Commissioner General of URA, Doris Akol revealed this at a news conference on Monday while releasing the revenue performance report for the year concluded in June.
She told reporters that over the last 5 years, tax to GDP ratio increased by 2.27 percent points and specifically, the tax to GDP ration in 2018/19 grew by 0.78 percent higher than the IMF target (0.5 percent).
Akol also reported that net collections for domestic taxes for the same period were Shs 9.7 trillion, with Shs 265bn above the target. In terms of year-on-year growth, this represented a 17.6 percent growth compared to 2017/18.
Corporation tax alone registered a Shs 331.3 bn surplus, attributed to the transport, storage and communication sub-sectors. Financial intermediaries and Pay As You Earn (PAYE) registered a surplus of Shs 148bn, attributed to the public sector that performed at 127 percent of target.
URA also reports that the net international trade tax collections were Shs 6.8 trillion with Shs 340m above target. This is a 10.8 percent growth compared to 2017/18.
Import items that drove the spike in tax yield are: worn clothing (Shs 42bn), cigarettes (Shs 29.2bn), motor vehicles (28.3bn), foot wear (Shs 27bn) among others.
In the 2018/19 financial year, Uganda’s economy grew by 6.1 percent against a projected growth of 6 percent. This growth was driven by mining and quarrying sector (at 17.6 percent), trade and repairs (6.6 percent), construction (5.7 percent), Manufacturing (4.4 percent) financial insurance activities (8.3 percent) and public administration (10.6 percent).
Akol said the value of Uganda’s dry cargo import volumes grew by 28.54 percent in 2018/19 compared to 16.3 percent in 2017/18.
Some of the initiatives that government undertook which drove this performance include the Taxpayer Registration Expansion Project which seeks to further penetrate the informal sector which accounts for 48 percent of the economy. A total of 166,663 new taxpayers have been added onto the URA tax register.
Akol also cited the construction of the URA tower which now houses all Kampala based URA stations and all other departments. This has reduced the cost of tax administration in terms of rent, transport and other costs.
In order to reduce smuggling, URA also deployed non-intrusive scanners in all major border points of Busia, Malaba, Mutukula and Entebbe. The National Targeting Centre (NTC) generated 2,717 real time risk alerts in regard to inconsistencies in declarations.
Regarding customs enforcement, during the 2918/19 financial year, 9,152 seizures were made out of which 8,000 were dutiable goods and 1,152 were non-dutiable. All together, these yielded Shs 78.48bn. The most smuggled goods included electric cables, rice, neutral spirit, garments, chewing gum, textiles, wines, footwear among others.
Through its tax investigations department, URA concluded investigations in 88 cases and recovered Shs 62bn.