John R. Musinguzi, the URA Commissioner General

Uganda Revenue Authority (URA) recorded Shs10.163 trillion in net revenue collections for the first 6 months of this FY 2021/22, against a target of Shs11.063 trillion.

This represents 45.44% of the annual target. A shortfall of UGX 900.81 billion was incurred with a performance of 91.86%.

It should be noted that URA was given a revenue target, by the Ministry of Finance, Planning and Economic Development, of Shs22.36 trillion which is 16.10% (Shs3.1 trillion)  higher than the actual revenue collection from the last financial year.

Addressing the press Wednesday morning about URA’s half year revenue performance, John R. Musinguzi, the URA Commissioner General, said in the last six months, domestic tax revenue collections were Shs6.23 trillion against a target of Shs7.18 trillion, registering a shortfall of Shs951.32 billion, and performance of 86.75%.

“The shortfalls were from direct domestic taxes (UGX 273.61 billion), indirect domestic taxes (UGX 487.20 billion) and Non Tax Revenue (NTR) (UGX 190.51 billion). 20.03% of the domestic tax shortfall was from Non-Tax Revenue (NTR),” Musinguzi said.

He added that customs tax collections in the first 6 months of the FY 2021/22 were Shs4.076 trillion against a target of Shs4.102 trillion, posting a shortfall of Shs26.33 billion, and performance of 99.36%. However, a year to year growth of Shs389.78 billion (10.57%) was realized this year compared to the same period in the previous Financial year 2020/21.

Sector performance  

During the period July to December FY 2021/22, 75.46% of the revenue was generated from the top 5 sectors including the wholesale and retail trade sector which had the most significant contribution, amounting to Shs3.03 trillion (29.41%).

The manufacturing sector followed with a contribution of UGX Shs2.41 trillion (23.42%). The financial activity sector contributed Shs1.06 trillion (10.33%). The information and communication sector contributed Shs880.97 billion (8.55%), while public Administration contributed 3.75%.

“The revenue growth in the Wholesale and retail trade sector is attributed to the wholesale of solid, liquid and gaseous fuels and related products. The growth of revenue from financial activities is attributed to contributions by mobile commerce due to gazetted regulations by Bank of Uganda’s directive to all telecom companies to separate financial services from telecom services,” Musinguzi said.

During the same period, there was a decline in revenue collection from the following sectors, in comparison to FY 2020/21; information and communication declined by 14.55%; Electricity, gas, steam and air conditioning supply by 37.79%; Real estate activities by 10.78% and construction sector by 14.06%.

URA attributed the decline to a slow down in business in these sectors resulting from the COVID-19 pandemic impact.

Direct Domestic Taxes performance

Direct domestic tax collections in the first half of FY 2021/22, (July – December 2021) were Shs3.37 trillion against a target of Shs3.65 trillion and a deficit of Shs273.61 billion, posting a performance of 92.5%.

“As a result, the direct tax collections for the period grew by Shs62.09 billion (1.87%), compared to the same period in the FY 2020/21. In addition, there were surpluses registered in PAYE (UGX 156.45 billion), casino tax (Shs8.84 billion) and tax on bank interest (Shs1.63 billion),” Musinguzi said.

He added: “For PAYE, the surpluses are a result of arrears recoveries, increase in staff numbers in some sectors like finances, streamlined Government payment process, which enabled prompt payment of PAYE by most of the Government entities and MDAs. For casino tax, surpluses are attributed to arrears recovery of gaming tax.”

He noted that deficits were incurred in corporate tax (UGX 232.75 billion), rental tax (Shs95.69 billion), withholding (Shs53.26 billion) and treasury bills (Shs14.75 billion).

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Indirect Domestic Taxes

Indirect tax collections for the period July to December 2021 were Shs2.29 trillion against a target of Shs2.78 trillion, registering a performance of 82.50% and a shortfall of Shs487.2 billion. As a result, a growth of Shs137.12 billion (6.35%) is noted compared to the same period in the FY 2020/21.

Value Added Tax Performance

Cumulatively, during the period July to December, VAT worth Shs1.51 trillion was collected against a target of Shs1.87 trillion registering a performance of 81.04% and a shortfall of Shs355.40 billion.

As a result, a growth of Shs75.23 billion (5.21%) was registered compared to the same period in the previous Financial year.

Tax register expansion.

As at end of January 2022, URA had 2,063,462 taxpayers.

“We are targeting to have at least 5 million taxpayers on our register,” Musinguzi said.