Government misses its revenue target by Shs180 billion
The fiscal surplus is a situation where the government has or raises more money than it spends during a particular period such as month, quarter and a year. PHOTO/ FILE
What you need to know:
- Government in December recorded a fiscal surplus of Shs335.42 billion, which was lower than the planned surplus of Shs515.93 billion.
The fiscal surplus is a situation where the government has or raises more money than it spends during a particular period such as month, quarter and a year.
by MARTIN LUTHER OKETCH
Government has missed its revenue surplus target by Shs180.51 billion due to shortfalls and under performance of revenue sources in terms of tax and grants.
The fiscal surplus is a situation where the government has or raises more money than it spends during a particular period such as month, quarter and a year.
The Finance Ministry in performance of the economy macroeconomic policy monthly report for December 2022 notes that the government operations in December resulted in an overall fiscal surplus of Shs335.42 billion, which was lower than the planned surplus of Shs515.93 billion.
“This was on account of the shortfalls registered under revenue and grants, which more than offset the lower than planned expenditure during the month,” said the Finance Ministry.
In the areas of revenue and grants, the government also registered a decline in December 2022.
The Finance Ministry said revenue and grants for December 2022 amounted to Shs2.782 billion against a target of Shs3.193 billion.
This implies that both domestic revenue collections and grants fell short of their respective monthly targets.
Domestic revenue
Domestic revenue collections for December 2022 stood at Shs2.634 trillion against a target of Shs2.950 trillion for the month as both tax and non-tax collections registered shortfalls during the month.
The Finance Ministry said tax revenue collections amounted to Shs2.517 trillion against a target of Shs2.799 trillion, leaving a shortfall of Shs281.46 billion.
“This shortfall emanated from all the three major tax heads. Direct domestic taxes (income taxes) for the month amounted to Shs1.310 trillion, a 96.0 percent performance rate against the planned Shs1.364 trillion, posting a shortfall of Shs53.40 billion,” the Finance Ministry said in the report.
This shortfall was attributed to the lower than anticipated collections under corporate tax and withholding tax on treasury bills and bonds.
Indirect tax
Indirect tax (consumption taxes) collections during the month amounted to Shs436.43 billion, posting a Shs101.17 billion shortfall against the target of Shs537.60 billion for the month.
This performance was mainly driven by a decline in sales and production volumes for items like cement, cooking oil, and wines among others.
INTERNATIONAL TRADE
Below target
Similarly, taxes on international trade continued to perform below target mainly driven by shortfalls on petroleum duty, import duty and VAT on imports. This was mainly due to lower than projected imports on which these taxes are charged. Statistics indicate that a total of Shs770.4 billion was collected in December 2022 against the target of Shs892.3 billion from international trade transactions.
