URA closes FY2022/23 with Shs57b surplus from arrears

Uganda Revenue Authority (URA) closed the 2022/2023 financial year account with a surplus of slightly more than Shs57 billion, according to the tax collector’s annual performance report.  This is an equivalent of the Parish Development Model allocation for 570 parishes.

Presenting the revenue performance report at the URA Tower in Kampala on Wednesday, the Commissioner General, Mr John Musinguzi Rujoki, noted that revenue collections for the ended financial year 2022/23 exceeded the revenue collection target of Shs 25.1 trillion hence the surplus.

“Recoveries from arrears were nearly Shs2 trillion, with the private sector contributing Shs1.2 trillion to it. This largely explains the source of surplus revenue. Additionally, a surplus of Shs724 billion from direct domestic taxes resulted from increased job creation and constructive return on investment, use of EFRIS and DTS,” he said.

Mr Rujoki added that these were significant sources of information and expansion of taxpayers registers by 882,286, indicating a 33 per cent growth.  By the end of the fiscal year, the total number of taxpayers on the register was 3,500,295.

Enforcement

Throughout the fiscal year 2022/23, customs enforcement operations were carried out across the country, resulting in the recovery of Shs133b through 14,187 seizures.

The majority of these recoveries were attributed to offences such as under-declaration (hovering at 43 per cent, misdescription/false documentation (at 11 per cent), undervaluation (at 4.54 per cent), outright smuggling (at 7 per cent), misclassification at 1 per cent), concealment (at 0.60 per cent), and other offences at 33 per cent.

According to Mr Rujoki, arrears management enabled URA to keep track of and maintain a register of all debts, which helps with follow-up to recover the owed amounts from taxpayers.

“This strategy involves reconciling ledgers, verifying taxpayer clearance certificates, and issuing agency notices. At the end of 2022/23, the total arrears stock was Shs4.4 trillion of which Shs264b were arrears and commitments generated by the government, while Shs4.2 trillion were owed to non-government entities,” he said.

Additionally, Shs4.3 trillion were domestic tax arrears, and Shs190b were customs tax arrears. Recoveries totaled nearly Shs2 trillion with government commitments being fulfilled to the tune of Shs713b.

Tax heads deficit

While the performance of domestic and international tax heads was somewhat promising, it is still low yet they are major revenue contributors.

In the fiscal year of 2022/23, the total revenue collected under domestic taxes was Shs16.4 trillion, surpassing the target of Shs16.1 trillion and resulting in a surplus of Shs236b.  This represents a growth of Shs2.7 trillion (20.21 per cent) compared to the previous fiscal year.

Also, direct domestic taxes collected exceeded the target with a surplus of Shs724b while non-tax revenue, including stamp duty and embossing fees, generated a surplus of Shs65b. However, indirect domestic taxes fell short of the target, with a deficit of Shs553.5b – which according to the CSBAG Executive Director, Mr Julius Mukunda, is ‘concerning’. 

Regarding international tax, a total of Shs9.3 trillion was collected. While it is a decent performance of 98 per cent, it is slightly below the target of Shs9.4 trillion.

Therefore, while there was a notable increase in revenue growth of Shs892b (10 per cent) compared to the previous financial year, the collections fell short of the target by Shs136b.

The combined shortfall emanating from domestic and international taxes amounting to nearly Shs690b, according to Mr Mukunda, is a tale-tell sign of an economy that is not actively generating enough economic activities.

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