Why URA Registered Ugx704b Revenue Shortfall In FY2021/22

By Our Reporter

According to an interim report released by Uganda Revenue Authority on Friday, the taxman collected Ugx21.6t for FY2021/22 being the biggest revenue collection by the tax body in the history of Uganda; showing a revenue growth of 12.44%.

However, the outturn for the year saw a net revenue shortfall of Ugx704b to hit the target of Ugx22.3t that was allocated to the taxman by the ministry of finance.

Speaking to Journalist from the Nakawa headquarters on Friday, John Musinguzi the Commission General attributed the shortfall to government’s failure to honour its tax obligation of about Ugx400b. “The biggest component of Ugx404b is tax from government commitments for which government acknowledges that this money has not been paid,” he added. The shortfall on the target by the general tax payers is Ugx300b.

Musinguzi also attributed the Ugx2.3t revenue growth to the measures that the taxman has put in place like tax education, improvement of arrears management, expansion of the tax register; currently there are 2.5 million tax payers a growth of 800,000 new tax payers from the previous financial year, enhanced customs and domestic taxes enforcements, strengthening the tax investigations initiatives and intelligence among others.

Domestic taxes contributed Ugx13.66t against the target of Ugx14.66t registering a shortfall of Ugx997.48b with a performance rate of 93%. There was Ugx1.5t(12.5%) more by way of domestic taxes compared to the last financial year.

In the customs department, Ugx8.4t collections against the target of Ugx8.1t posting a surplus of Ugx294.6b, hence registering a performance of 103%. This means that traders contributed Ugx929.25b more compared to the last financial year.

Oh how the Authority will ensure that they collect the Ugx25.15t allocated to it by government without new taxes Musinguzi had this to say: “URA will focus on using intelligence and technology to close any revenue leakages. We shall continue with the ongoing tax register expansion program and cleaning up the register while also promoting staff integrity, professionalism, and zero tolerance to corruption.”

The Authority also will focus on consolidating the gains scored with the adoption of the key technologies such as Electronic Fiscal Receipting & Invoicing Solution (EFRIS), the digital tracking solution (DTS), and rental management system that are all aimed at improving business efficiencies to ultimately combat revenue leakage.

The cargo tracking system and non-intrusive inspection technologies will also be fully enhanced and integrated with the Authority’s central IT systems for effective trade facilitation and transparency according to the Commissioner General. Tax Payer education programmes, improving of service delivery, and promoting transparency will also continue.

Musinguzi admitted the shortfall and it is not something that the taxman is proud of because they want to do better and looking  at collecting surplus in the future. He however noted that there is steady growth in revenue mobilization (12.44%).

The Authority plans to grow the tax register to about 5 million tax payers by 2025. “It is work in progress, though it will not pay off immediately,  but it will in the long run,” Musinguzi concluded.