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Alarm As Uganda’s Tax Arrears Hit Shs3.6 Trillion

Uganda’s tax arrears have now reached Shs3.624Trn, the 2020/2021 national budget frame work paper by Parliament’s Budget Committee has revealed.

The report that was presented on the floor by Patrick Isiagi, Vice Chairperson, Budget Committee last week highlighted that the stock of tax arrears has steadily grown from Shs1.005Trn in FY2013/2014 to Shs3.624Trn as at end of FY2018/19.

 “The stock of tax arrears has grown effectively by Shs2.619Trn or by 260.5% in five years, despite some recoveries by URA,” Isiagi said.

It should be recalled that last year, the Budget Committee sounded alarm over the increasing debt stock that was recorded at Shs2.6Trn, with the Committee describing the amount as worrying trend and that the amount Uganda Revenue Authority is yet to collect is colossal which if paid would significantly reduce the stress on Uganda’s budget.

The Committee even called on Speaker of Parliament to institute a Committee to probe the tax arrears after URA told MPs that increasing tax arrears were a result of Government’s failure  to pay suppliers of goods and services provided and in some incidences, URA had been forced to release goods before taxes are cleared.

In a related development, URA is seeking for Shs500M for the purchase of drones, body bugs and worn cameras for the customs enforcement team to enable them fight smuggling which is causing loss of revenue to government to government.

The Authority argued that the items if provided would enable the enforcement team to monitor the porous borders as well as enforcement officers in the execution of their duties.

In the 2020/2021 national budget, the total resource inflow is projected to reduce by 2% from Shs40.488Trn in FY 20l9/2020 to Shs39.641Trn in 2020/2021. The reduction in resource inflow is mainly attributed to a reduction in the projected external financing.

Tax revenue is projected to increase from Shs18.82Trn in FY2019/20 to Shs20.04Trn in FY2020/2021, indicating an increment of 6%.

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