Uganda: How Government Plans to Raise Taxes for 2020/21

The government targets a total revenue collection of Shs21.4 trillion to support the budget for 2020/21.

Out of the targeted amount, Shs19.89t will come from direct taxes imposed by the Uganda Revenue Authority, Shs1.5 trillion from Non-Tax Revenues such as fines and bank charges while Shs83.1b will come from appropriation in aid (income that government departments are authorised to retain at source).

To achieve this ambitious revenue target, the government plans to increase taxes to a tune of Shs2.7 trillion.

The government on Tuesday presented tax measures through which it will be able to raise some of the required taxes. From the projections seen by the Daily Monitor, the government intends to raise Shs1.8b from stamp duty; Shs 381.9 from Excise Duty and Shs67b from Value Added Tax.

The government also anticipates that the country will earn up to Shs293.1b from income tax.

The Minister of Finance, Mr Matia Kasaija, indicates that the new measures, if adopted by Parliament, will address changes in the exchange rate depreciation while generating revenue, and promoting local and international airlines.

Meanwhile, under the excise duty, the government has introduced a Shs10,000 tax levy on every kilogramme of polythene bags in what Mr Kasaija calls a spirit intended to conserve the environment.

The government proposes a Shs44.07 trillion budget for the year 2020/21, whereby Shs29.9 trillion will be provided domestically through the Consolidated Fund and the rest will come from external funding sources such as aid, grants and loans.

To this end, the government has undertaken to revise tax measures by increasing revenue targets.

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