The Uganda Revenue Authority (URA) has for the first quarter of the 2020/21 financial year (July to September) collected a net revenue of 4,070.30 billion shillings (4.07 trillion shillings) against the set target of 2,999.74 billion shillings, performing at 135.69%.
The pronouncement was made by URA Commissioner General John Musinguzi Rujoki while launching the “tax payers’ appreciation season” which is a month in the year dedicated to appreciate compliant tax payers and also reinforce the culture of voluntary compliance.
The surpassing of the revenue collection targets registered a significant surplus of 1,070.55 billion (over 1.07 trillion shillings).
“Revenue growth of 64.80 billion (1.64%) was registered during the period of July to September 2020 compared to July to September 2019. The growth registered in September 2020 was 8.27% and August 2020 (1.40%) shows a resurgence from the impact of COVID-19,” said Rujoki.
Rujoki announced that the domestic taxes collection during the period of July to September 2020 were 2,456.46 billion (2.45 trillion), performing at 131.66% and 590.75 billion above the target.
In addition, the domestic taxes collection registered a growth of 51.01 billion (2.12%) during July to September 2020 compared to the period July to September 2019.
“International trade tax collections in July to September 2020 were 1,714.05 billion (1.7 trillion), performing at 138.87% with a surplus of 479.79 billion shillings. When compared to the July to September 2019, customs tax collections grew by 23.93 billion (1.42%) in July to September 2020,” he said.
Local Excise Duty contributed a surplus of 107.87 billion shillings, which mainly was from mobile money transfers (17.52 billion surplus), phone talk time (12.51 billion surplus), beer (27.67 billion surplus) and Over the Top (8.27 billion).
The Commissioner General attributed the surplus to the increased transactions via phone through voice and text owing to limited movement of people amidst the COVID-19 lockdown.
Beer production increased by 7.34% in the period, which was matched by an increase of 6.5% in beer sales.
Value Added Tax (VAT) collections were above the target by 179.35 billion; cement contributed a surplus of 28.53 billion, phone talk time, a surplus of 17.89 billion, wholesale and retail, a surplus of 22.56 billion while spirits registered a surplus of 12.84 billion.
The ongoing infrastructure developments in the country boosted demand for cement leading to an increase in sales by 28.63% while the production and sale of spirits increased by 42.77% and 45.68% respectively, owing to spirits being a raw material to the highly demanded sanitizers.
Rujoki noted that the implementation of Digital Tracking Solutions (DTS) boosted collections and has aided the enforcement and tracking of locally manufactured and imported products.
Corporation tax registered a surplus of 35.20 billion which is mainly attributed to URA’s pursuit of the alternative dispute resolution as a way of resolving outstanding tax matters.
International trade taxes performed above the target as a result of the reopening of economies and supply chains.
“Uganda’s imports grew by 31.89% in July to September 2020 compared to the same period in 2019. Imports increased by 7.41% which explains the International trade performance.”
On matters of sectoral contribution to the revenue, Rujoki noted that 75.88% of the revenue collected was from top 5 sectors of; the wholesale and retail sector which contributed 30.66%, the manufacturing sector which contributed 23.17%, ICT (9.30%), financial and insurance services (7.69%) and Public administration which contributed 5.06%.
“There was growth in revenue in some key sectors like manufacturing which grew by 18.54%, ICT grew by 20.49% while revenue from the wholesale sector grew by 2.30%,’ he said.
Despite the growth in revenue collection in the above mentioned sectors, some other sectors registered significant declines in revenue. These include; accommodation and food services which declined by 58.82%, education sector which declined by 31.94%, Arts and entertainment and recreation declined by 55.59% while a decline of 33.56% was registered under water supply.
Rujoki attributed the decline to a slowdown in business due to the outbreak of the COVID-19 pandemic.
In a bid to increase compliance and influence tax payers’ behavior, URA has implemented various tax administrative measures to support revenue generation.
They include; integrity enhancement, voluntary disclosure, Electronic Fiscal Receipting and Invoicing Solutions (EFRIS) and Digital Tracking Solutions (DTS), enforcement operations and Alternative Dispute Resolution.
Meanwhile, Rujoki launched the Tax Appreciation Season (TPAS) to appreciate compliant tax payers and also enforce the culture of voluntary compliance.
“In a special way, we want to thank those tax payers who have continuously fulfilled their obligations amidst the impact of COVID-19. Because of your commitment to meet your tax obligations, we have been able to register great revenue results in the first 3 months of the new financial year. For that, we commend you,” he said.
TPAS will run for a longer period from October to December 2020 under the theme “celebrating the tax payers of Uganda.”
Among the activities involved include; profiling the top 10 most compliant tax payers per district, the top 50 tax payers per region and top 15 at national level. This will be followed by the award ceremony of the top complaint tax payers.
This financial year 2020/21 (July 2020 to June 2021), URA is expected to collect 19,697.99 billion shillings (19.7 trillion) compared to what was targeted last financial year 2019/20 at 20,344.13 billion (20.3 trillion shillings).
This, Rujoki said, is a revised budget, down to about 2 trillion from the initial budget taking into consideration the impact of COVID-19 pandemic on the economy.