Increase in domestic revenue helps URA surpass target

Kampala, Uganda | THE INDEPENDENT | The Uganda Revenue Authority (URA) has outperformed its financial targets for the last fiscal year, with a substantial increase in locally collected taxes. The performance report from the authority issued Wednesday shows a remarkable surplus in domestic revenues, particularly in direct taxes, which recorded a surplus of Shillings 724.62 billion.

This surge in direct tax revenue contributes to one of the URA’s strongest performances in recent memory. In the last fiscal year, the URA collected Shillings 25.209.05 trillion, surpassing the government’s target by Shillings 57.48 billion. The official target set by the government for the URA’s collections during that period was Shillings 25.151 trillion.

According to the report, the cumulative domestic revenue reached Shillings 16.425 trillion, exceeding the targeted Shillings 16.188 trillion by Shillings 236.89 billion. John Musinguzi, the URA Commissioner General, emphasized that the most substantial performance improvement was seen in direct revenue, followed by non-tax revenues, while indirect taxes experienced a shortfall.

Musinguzi elaborated, “Direct domestic taxes collected exceeded the target with a surplus of 724.62 billion Shillings, while non-tax revenue including stamp duty and embossing fees generated a surplus of 65.81 billion. However, indirect domestic taxes fell short of the target, with a deficit of 553.54 billion Shillings.” Musinguzi attributed this strong revenue performance to the country’s sustained economic growth and enhanced administrative measures.

The report reveals that although international revenue collections increased by 892.47 billion shillings, they fell short of the targeted amount by 136.05 billion shillings. The international revenue segment collected a total of 9.326 trillion shillings, below the set target of 9.462 trillion. Several other taxes also demonstrated surpluses, including import duty at 275.17 billion, temporary road licenses at 12.66 billion, and export levy at 3.75 billion.

However, the report also highlights deficits in several tax categories: VAT on imports decreased by 161.57 billion, petroleum duty dropped by 152.89 billion, excise duty saw a decline of 55.35 billion, withholding tax decreased by 23.79 billion, infrastructure levy declined by 19.10 billion, and the surcharge decreased by 14.93 billion.

It’s noteworthy that this impressive revenue performance coincides with a period when Uganda’s financial assistance in terms of grants and loans from the World Bank was suspended due to concerns about the anti-homosexuality law.

Despite this suspension, Musinguzi believes that the strong performance indicates Uganda’s potential for greater financial independence and economic growth. He also expressed confidence in the URA’s ability to meet and exceed this year’s revenue target of 30 trillion shillings.

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