URA commends the business community for tax compliance

URA commends the business community for tax compliance

On the release of their half year revenue performance in Kampala, the tax collectors thanked the business community that met their tax obligations besides the challenges of the Covid19 pandemic that evaded the globe.

Uganda Revenue Authority revealed that the Finance Ministry gave them a revenue target of over 22billion which was 16.10% higher than that of the last financial year.

The tax collectors also revealed that for the first 6months of the financial year 2021/2022, the net revenue collections were Ush10,163,09 billions but this figure was below their target of Ush11,063,90 billions hence a shortfall of Ush 900.81billion.

This shortfall in the taxes is mainly from Domestic taxes that include Direct and Indirect Domestic taxes plus the Non tax revenues.

The tax collectors also revealed that, in the period of July to December of the Financial Year 2021/22, the top five sectors that contributed greatly in taxes were Public Administration, Information and Communication, the Financial Activity sector, Manufacturing sector plus the Wholesale and Retail sector which all combined contributed over 70% of all the revenue collected.

“The directive from Bank of Uganda to all telecom companies to separate financial services from telecom services also was a key factor that attributed to the growth of revenue from financial activities from Mobile commerce” the Authority revealed.

The construction sector, Real estate activities, Electricity, gas, steam and air conditioning supply were amongst those that registered declines in revenue collections but this was attributed to the slow down in business that resulted from the Covid19 pandemic impacts.

Though Domestic taxes performed poorly in the Half Year Revenue performance, the Pay As You Earn (PAYE) registered surpluses and this was attributed to the increase of staff numbers in sectors like Finance, plus also the streamlined government process  that enables prompt payment by most of the government entities while the growth of Value Added Taxes (VAT) was attributed to an increase in standard rated sales, growth in sales quantities of some taxi payers and also the increased debt recovery for other taxi payers and this was due to the lifting of some Covid19 restrictions.

The Local Excise Duty performance also registered some significant surpluses and this was realized in the levy on mobile Money withdrawals, money transfers and Sugar.

As regards to International trade taxes performance also known as Customs, the Revenue Authority noted that it collected a revenue of 4,076.18billion with a positive growth rate in all tax heads except for Surcharge and withholding taxes on imports that decreased.

The Authority also observed a decline in import and export value, decrease in tax yields by some items such as plastic footwear, cigarettes and others, Tax policy on some exports and also a reduction in fuel volumes.

The Authority further registered a 10.24% growth of new tax payers and a number of 182,553 new members was added in the register in that period and in their New Financial resolutions they hope to  deepen taxpayer education, launching Mobile tax offices, enhance the URA client service support, simplifying their key processes and many others.

The Authority pledged to continue supporting the tax payers as they collaborate to develop the Pearl of Africa Uganda.