URA manges to meet required target in past financial year

Uganda Revenue Authority managed to meet it’s set target for the financial year of 2020/21 that just ended recently.

This was possible despite falling by a deficit of Shs 2.3 trillion compared to the 2019/20 financial year.

Revenue grew by one percent equivalent to Shs 2.5 trillion according to the URA revenue performance report for the period ended on June 21st and this was the highest ever recorded in four years.

The URA Commissioner General John Musinguzi while presenting the 2020/21 performance report said that despite the recorded growth, COVID 19 greatly hindered their targets because it had slowed down the economy’s growth.

“In the 2020/21 financial year, URA collected net revenue of Shs19. 2 trillion posting an estimated tax to gross domestic product ratio of 12 per cent,” Musinguzi said.

He however noted that the overturn of the 2020/21 financial year was lower than the targeted Shs 21.6 trillion.

It should be noted that the government had given URA a target of Shs 21.6 trillion. There was a need to progressively enhance tax to GDP ratio to 15%.

However with the global COVID 19 pandemic, both local and international economies were ravaged which hampered income.

An example that was cited locally was the PAYE tax which is one of the major ways of collecting revenue locally.

A loss of Shs 315 billion was however noted in the tax because there was a large loss of jobs by employees after different companies scaled down the employees due to loss of revenue.

Corporate tax also registered a deficit of Shs 239 billion because of the losses noted in major sectors of the economy. These were worsened by non-compliance and poor debt enforcement.

Despite these short falls, growth was registered in numerous sections such as debt recovery. This yielded about Shs 1 trillion and was attributed to a number of reasons.

These included relaxing of other dispute measures that raised about Shs 365 billion. Voluntary disclosure initiative also contributed significantly.

Implementation of several tax compliance measures such as the digital tracking solutions and electronic fiscal receipting solution also contributed to this growth.

Faster clearance, introduction of a bonded warehouse information management system, easing of TIN application, automation of withholding tax exemption and tax clearance certificate issuance were also noted as key contributors to the growth.

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