Uganda Revenue Authority (URA) has continued to register poor tax performance with November hitting a lower target in tax collections. According to a Ministry of Finance, the November 2019 report on the performance of the economy shows all major tax heads registered shortfalls. Domestic taxes, URA hit a shortfall Shs 196bn, collecting 1.42trillion against the target […]
Uganda Revenue Authority (URA) has continued to register poor tax performance with November hitting a lower target in tax collections.
According to a Ministry of Finance, the November 2019 report on the performance of the economy shows all major tax heads registered shortfalls.
Domestic taxes, URA hit a shortfall Shs 196bn, collecting 1.42trillion against the target of 1.6trillion.
Pay as you earn, which is paid by employed people fell signifying that either employers postponed their payments to a later date or reduced on the workers they employ.
Withholding tax, one that is deducted at source, also fell meaning that companies didn’t trade with each other vibrantly to allow such deductions.
Internationally, the report indicates that imports targeting Christmas festivities were less than anticipated in November hitting government taxes hard. During festivities the government expects traders to import more merchandise which was not the case.
The government, therefore, hit a shortfall of Shs 49 billion in both import duty and Value Added Tax (VAT) with imports falling short by 12.8% and 11.9% respectively.
Secretary to the Treasury Keith Muhakanizi said between July and October, government registered a tax shortfall of Shs 605bn.
The government now says it will have to borrow Shs 2.4tn from Stanbic bank and Development Trade Bank to cover the shortfall and facilitate a 40 trillion budget for the next financial year.
