1 November 2012

Uganda: URA Collections Increase By 15 Percent

The increased production of goods and services in the country has catapulted Uganda revenue collections up by 15%, showing clear signs that Uganda's economy is recovering from the economic meltdown it suffered in the previous financial year.

Releasing a report on the revenue collections for the first quarter of the current financial year (July-September), URA boss Allen Kagina said: "This is good news that our economy is now doing very well due to increased production."

URA achieved revenue collections totaling 1,554.96b which is slightly close to the targeted 1610.50b, causing a shortfall of sh55.54b. September 2012 monthly collection registered a growth of 10.54% as compared to September 2011 while the total cumulative growth in revenue collections in the first quarter grew by 14.87% as compared to the first quarter of the 2011/2012 financial year.

The report shows that domestic taxes preformed above target by 4.10% to create 53.2% of the total revenue that has been collected.

International trade taxes contributed 45.27% and non tax revenues contributed 1.47% of the revenue collections. The report however shows that Uganda lost billions of money resulting from the act of Kenyan Revenue Authorities to force a cash bond on Uganda's merchandise especially sugar and used cars.

This resulted in a reduction in the number of motor vehicles cleared (taxed) on monthly basis from 4600 units to 2822 units by September. Kagina explained that the Kenyan government made the move as a response to a trade crime by Kenyan traders who offload goods meant for Uganda in Kenya and sell them in Kenya.

"They decided to impose cash bond on the Uganda goods which is refunded when the goods are successfully transported to Uganda. But we explained to them how that makes our traders to incur more costs," Kagina explained.

She said a team of Uganda's revenue authority and Kenya revenue authority has done a study to solve the impasse. This impasse has contributed to the fall of revenue collections on used vehicles from sh13.528b to 11.030b whereas revenue collections on sugar dropped from sh2.154m to sh300m registering a revenue drop of 2.497b.

The revenue collections on motorcycles also drastically dropped from sh13.528 registered in the first quarter last year to only 7.511b in the first quarter of this year. Kagina said the Government achieved its target of reducing inflation to single digits.

The report shows that general inflation dropped from 11.8% in September - August to only 4.8% and food crop inflation which reached 50% last year dropped from 12.8% in August 2012 to only 6.3% in September.

In the East African regional comparison, Uganda achieved the highest growth in domestic tax revenue collections of 104.10% followed by Tanzania which had 102.70%, then Rwanda at 99.20% and Kenya at 91.30%. The figures for Burundi had not yet come in.

Rwanda had the highest growth in terms of revenue collected from international trade taxes at 116.90% followed by Tanzania at 91.20%. Uganda registered 89.13% revenue growth from international taxes while Kenya got 83.50%.

The taxes government recently imposed on gambling have yielded results as URA has been collecting sh500m per month from the 50 companies and 13 individuals who trade in it.

Copyright © 2012 New Vision. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.