Kampala — The Uganda Revenue Authority (URA) failed to hit its revenue collection target for the financial year 2012/13 due to a fall in international trade taxes mainly caused by lower than projected fuel imports, the tax body has revealed.

Announcing the annual revenue performance at the Customs Business Center in Kampala last week, Ms. Allen Kagina, the Commissioner General of URA said that net revenue collections for the FY 2012/13 were Ush7,149.48b ($2.7m) against a target of Ush7,284.67b, reflecting a performance of 98.14% and a deficit of Ush135.19b ($51m).

Despite the deficit, the net revenue collections grew by Ush941.13b ($361m), a growth of 15% from the previous year.

The domestic tax head performed above target registering a surplus of Ush202.27b ($77.8m) (104.97%) while the International taxes posted a deficit of Ush322.41b ($124m), mainly attributed to lower than projected fuel imports.

Kagina said that during ther year, the growth in imports of diesel and petrol was 5.4% which was lower than the projected growth of 9.55%. Actual compared to projected consumption of Diesel was 94.05% and Petrol was 99.32%. This led to a shortfall of Ush100.62b ($38.7m).

She said: "The import volumes for all fuel products of diesel, petrol, jet fuel and kerosene for FY 2012/13 grew by 0.56% (from 1,408.28 million litres in FY 2011/12 to 1,416.14 million litres in FY 2012/13) which was lower than the projected growth of 6.6%."

It is however not clear why the volume of fuel imports grew below the projected target but some analysts have said that it could have been as a result of the switching off of the thermal generators.

This argument can be supported by the figures released by URA that showed that the tax body collected a surplus of Ush144.67b from VAT on electricity because of increased power capacity.

Three power plants were commissioned during the FY2012/13; Bujagali, Nzizi and Nyagak power plants.

Kagina added that foreign exchange rate fluctuations also led to an estimated revenue loss of Ush22.85b.

"The applied average exchange rates of Ush2,584.02 against the dollar for the FY 2012/13 were below the projected rate of UGX 2,609.30," she explained.

The domestic taxes performance of 104% is attributed mainly attributed to an increase in withholding tax on bank interest rates of Ush103.77b and an increase on VAT on electricity.

A regional comparison of the performance of the revenue bodies shows that only Rwanda Revenue Authority (RRA) managed to hit their gross revenue mobilization target registering a performance of 101% followed by Uganda at 98%, Burundi at 91% while Kenya performed at 90.8%.

Uganda was the best performer in domestic revenue mobilization registering a performance of 105%, followed by Rwanda at 104%, Kenya Revenue Authority at 93% and Burundi at 89.4%.

However, all the partner states performed below target in international trade revenue mobilization. Rwanda at 94.7%, Burundi at 94.3%, Uganda at 90.5% and Kenya at 87.2%.

The major sectors that contributed to Uganda's revenue in FY2012/13 were manufacturing (25.11%), wholesale and retail (25.06%) with Transport, Storage and communication contributing 11%.

With the government of Uganda raising the revenue collection target for the FY13/14 by 17% to Ush8.5trillion, URA warns of tight enforcement measures ahead as it races to widen the tax base.

The tax body has said that it will reach out to the informal sector by working closely with the local governments to identify the tax payers.

"We started mooting strategies of accessing the large informal sector. This financial year, we shall enhance that by working closely with the local governments to identify the local tax payers. They are on the ground where we are not and they are the ones who issue the trading licences," Kagina said.