The Uganda Revenue Authority (URA) has recorded a shortfall of Shs 240bn in the first three quarters of FY 2016/2017 amidst a tough economic environment.
Addressing the media on Wednesday at URA headquarters, Commissioner General Doris Akol said because of a bad economy “we may fall short of the target.”
“Uganda Revenue Authority collected UGX 9.2 trillion ($2.5 billion) in the past nine months of the financial year 2016/2017 however the Authority recorded a shortfall of UGX 240 billion in the same period,” Doris Akol the Commissioner General said.
Akol said drought that hit agriculture sector, constrained demand and a hostile external market for Uganda were reasons among others that are behind the shortfall.
Akol was presenting the latest Revenue Performance Review for the last nine months. “This economic turbulence has affected the level of economic activities and revenue collections from the key performing sectors with sectors like the manufacturing, construction and real-estate sectors registering negative growth which affected revenue collections,” she said.
Shs 9.2 trillion has been collected, instead of Shs 9.4 trillion, in the first 9 months (3 quarters of FY2016/17)
However, in the month of March 2017 alone, Akol said, they collected Shs 1 trillion, representing a surplus of Shs 5.4bn and a growth of 13% compared to March 2016.
“We have also tightened revenue leakage points and introduced new systems and procedures, enhancing revenue efficiency,” Akol told the press at URA’s Nakawa headquarters.
Domestic Taxes contributed 57.17% to the collections while international trade has contributed 42.84 ℅. Although collections for the last three quarters indicate a growth in revenue of 13.51℅ compared to the same period (nine months ago),
Akol said the target of UGX13.1 trillion ($3.6 billion) which had earlier been set for the current financial year may not be achieved because of the economic slowdown.
Uganda’s GDP for 2016/17 is forecast at 4.5% compared to 4.6% recorded the previous financial year. In other years, Uganda has been comfortably notching up growth of 5% and above.
The manufacturing sector registered a decline while the financial sector also suffered as private sector credit reduced significantly yet the majority of the traders depend on credit to run businesses and pay taxes.
Tax yield of major imported items and increase in re-exported and ex-warehoused goods also registered a decline. Although the tax body estimates that the expected impact of the economic slowdown to revenue mobilization is a shortfall of approximately UGX 131.17 billion, Akol said the introduction of new systems and procedures and also tightening revenue leakage points will help URA improve revenue efficiency.