Uganda’s tax body Uganda Revenue Authority has failed to hit tax collection target of 29trillion in the financial year 2023/2024, this website has learnt.
In the last national budget finance ministry put URA to task to collect 29 trillion for FY2023/2024.
According to Henry Musasizi State Minister for Finance URA is expected to collect taxes worth UGX 31.574 trillion to finance the 2024/25 national budget, which is an increase of UGX 1.9 trillion from the current target of UGX 29.672 trillion in the current FY 2023/24.
Musasizi expects URA to roll out and enforce electronic receipting and invoicing solutions.
“The objective of this reform is to ensure that taxpayers are able to keep clear records, file returns in a timely manner, and they are able to efficiently assess their VAT. I call upon every Ugandan to support this cause,” Musasizi said.
However MPs have expressed scepticism about the revenue collection target set for URA with many citing figures from Ministry of Finance that indicated that by the end of February 2023, the net revenue collections were UGX 17.48 trillion against the target of UGX 18.5 trillion hence a shortfall of approximately UGX 1.1 trillion.
In URA’s updated figures, the Commissioner General revealed that as of 31st March 2024, the Authority collected domestic taxes to the tune of UGX 12.886 trillion against a target of UGX 19 trillion. Meanwhile, the international trade taxes collected amounted to only UGX 7.051 trillion against the target of UGX 10.669 trillion. This, according to URA, brought the total revenue collections by February 2024 to UGX 19.937 trillion against the target of 29.672 trillion.
The Deputy Chairperson of the Committee on Finance, Jane Avur, asked the URA officials to explain what plans they have in place to ensure the revenue target is hit by the end of the financial year in June.
“Whereas our annual target revenue collection is about UGX 29.6 trillion, up to the first half of the year and later on in the Commissioner General’s report up to the end of the year, we are still at UGX 19 trillion. We would like to know as a Committee what corrective measures you have come up with for us to hit the target by June 2024. Because a lot of activities have been planned by different sectors and a lot of commitments have been made by the Government based on that target,” said Pacuto.
Agnes Apea, Woman MP Amolatar District,suggested pported the reinstatement of wage bill so that URA is able to carry out its mandate with new tax measures about to be passed by Parliament.
According to URA reports performance URA in 2023/24 registered 882,286 new taxpayers which saw the Authority close 2023 with 3,500,294 taxpayers.
URA needs additional UGX 284.22 billion of which; UGX 31.5 billion is for development of the oil and gas monitoring system.
The tax body is also seeking UGX 30.11 billion to establish a Tax Academy, while UGX 28.30 billion is needed for the disaster recovery cyber security infrastructure, and UGX 14.16 billion would be spent on replacing obsolete.
URA also indicates that net revenue collections have been improving over the years, growing from Shs16. 6 trillion in the period ended June 2020 to Shs25. 2 trillion, representing a 66.5 percent growth in the four financial years to June 2023.
According to Afrobarometer, a pan-African independent research network that measures public attitudes on economic, political and social matters in Africa, only 1 million Ugandans pay tax, though 3.5 million were registered as taxpayers at the end of 2022/2023 fiscal year.
Uganda’s GDP is projected to grow to Ushs. 207.22 trillion (US$ 55.17 billion) in the FY 2023/24, translating to US$ 156.76 billion in PPP terms. This in turn is projected to grow the GDP per capita to US$ 1,186, up from US$ 1,096 in FY 2022/23.
Uganda Revenue Authority (URA) has requested Parliament for extra UGX 169 billion to cater for the payment of wages of the newly recruited staff, despite the tax body failing to utilize all its wage bill for two consecutive years.
Henry Musasizi, Minister of State for Finance, says in the coming 2024/25 financial year, URA is expected to suffer a budget cut of UGX 55.73 billion due to the failure to utilise its wages for two years in a row.
“The budget for URA for 2024/25 is UGX 564.26 billion which is slightly lower than the current 2023/24 resource envelope of UGX 619.99 billion. This is because URA suffered a budget cut of UGX 55.73 billion on unutilised wage. There is a wage which wasn’t utilized for the last two financial years and the system has picked it as one of the candidates to be utilized for other purposes,” said Musasizi.
Documents tabled before Parliament indicate that in 2024/25, URA’s approved budget is to the tune of UGX 564.26 billion of which, UGX 197.77 billion is for wage, UGX 321.17 billion is for non-wage expenses and only UGX 45.32 billion is for development expenditure.
This means that if the request for extra UGX 169 billion is approved by Parliament, URA’s wage bill will shoot to UGX 366.770 billion
