Kampala — It seems the reforms employed by Rwanda and Burundi has begun to pay off if the revenue collection targets are to be used as a gauge to measure the results.
Having been ranked by the World Bank's Doing Business Report 2012 as the fifth among economies that improved most, Burundi's overall gross revenue mobilization for the month of January, 2013 was at an impressive 103%. It was the highest in the region only followed closely by Rwanda at 101.5%.
Tanzania performed at 99.6%, Uganda at 96.5% while Kenya performed at 91.0% in gross revenue mobilization.
The World Bank report pointed to Burundi's One Stop Shop that has eliminated requirements to have company documents notarized, to have information on new companies published in a journal and to register new companies with the Ministry of Trade and Industry.
In Burundi, only four steps are required to register a business, half the number needed on average by the rest of sub-Saharan Africa.
However, one may argue that Burundi and Rwanda perhaps collected above target revenues because of the small size of their economies compared to their East African peers.
Uganda Revenue Authority (URA) for instance was tasked to collect an additional Ush34b ($13m) after donors suspended aid to the country following the alleged mismanagement of funds in the Office of the Prime Minister.
On a cumulative basis (July 2012 - January 2013) URA has registered a deficit of Ush147b ($56m) hence the tax body has decided to adopt tough enforcement measures aimed at covering up the deficit in the remaining five months of the FY2012/13.
According to Ms. Sarah Banage, the URA Assistant Commissioner Corporate and Public Affairs, the cumulative shortfall effectively implies that the target for the remaining five months must increase by Ush29.4b ($11.3m) on average if the annual target is to be realized.
"We shall intensify collection efforts through filing of summary suits and committal of defaulters to civil prison. This will be done first against tax payers who appeared on the shame list and refused to comply with the notice. We shall also begin sealing off non-compliant tax payers' offices and businesses," she said.
The Ugandan tax body's deficits have mainly been caused by the shortfalls in international trade as a result of low fuel volumes which registered a decline of 5.4% posting a deficit of Ush10b ($3.8m) in January 2013. VAT on imports also declined by 7.3% posting a shortfall of Ush2.2b ($840,000).
Banage was addressing the press during the release of the monthly revenue performance at the URA Customs Business Center in Kampala last week.
The first company to get a feel of the tax body's enforcement actions was Pioneer Easy Bus Company, a city transport service that had all its buses impounded recently for failure to remit revenues of about Ush8billion ($3m).
She however clarified that in the strategy to collect these taxes, new taxes were not being introduced but rather it was one of collecting delayed money.
"It is money that was not realized in the first half of the year is going to be collected by strategies like enforcement, matching data with ASYCUDA World for third party information," said Banage adding, "In tax administration, you normally work with the factors you can control because the international trade taxes are not within your control. So you focus on what you have full control. May be it's a positive sign that your economy is stable."
The revenue performance report released by the tax body showed that in January 2013, URA collected net revenues of Ush620.5b ($240m) against a set target of Ush591.9b ($228m), posting a surplus of Ush29b ($12m).
The surplus was as a result of good revenue collections from domestic taxes that performed above target by Ush37b ($14m).
International trade taxes have however continued to post deficits with URA registering a deficit of Ush8.6b ($3.3m).
The impressive domestic tax performance according to the report is attributed to a surplus of USh12.8b ($5m) from Pay As You Earn (PAYE), a Ush6.8b ($2.6m) surplus from Corporation tax, Ush4.3b ($1.6m) surplus from VAT on phone talk time, VAT from the electricity subsector that had a surplus of Ush3.5b ($1.3m) as well as surpluses from VAT on beer and local excise on spirits.