URA seeks to collect Shs29 trillion in taxes
State Minister for Finance Henry Musasizi and URA Commissioner General John Musinguzi Rujoki appear before Parliament’s Finance committee on April 6, 2023. PHOTO/DAVID LUBOWA
What you need to know:
- The tax body says their ultimate goal is to achieve the tax Gross Domestic Product (GDP) ratio of about 18 percent.
Uganda Revenue Authority (URA) has said it plans to collect Shs29.3 trillion in taxes next financial year, which starts on July 1, which is Shs3.8 trillion higher than its current target.
The revelation was made by URA Commissioner General John Musinguzi while presenting their 2023/24 ministerial policy statement before Parliament’s Committee on Finance yesterday.
Accompanied by State Minister for Finance (General Duties), Mr Henry Musasizi, the chief executive of the tax body said: “The total revenues are projected at Shs29.3 trillion. The ultimate goal is to achieve the tax Gross Domestic Product (GDP) ratio of about 18 percent at the end of the domestic revenue mobilisation strategy implementation.”
URA, which collects taxes about 13-14 percent of national wealth, is a percentage-point or two lower than the East Africa member states’ lowest tax to GDP ratio threshold.
“I would like to urge all the stakeholders to support us as we can only effectively deliver on our mandate [with better] mobilisation of revenue,” Mr Musinguzi said.
The URA team appeared before lawmakers on the day this newspaper published a slash about the Inspectorate of Government (IG) investigating alleged corruption and tax maladministration by staff of the tax body.
The Shs29.3 trillion new tax target that URA has set for itself next financial year is the exact figure a highly-placed source told this newspaper six months ago as the realistic revenue the taxman would realise annually had it not been for leak of collections through under-taxation, questionable tax waivers in billions of shillings and manipulation of import and export records.
In a rejoinder for the article, the tax body said there may be a few bad apples in its rank and file, but there was more good news than bad news to report, including realisation of Shs21.6 trillion tax collections out of a targeted Shs22.3 last financial year. It is this gain which officials said had buoyed them to consider Shs29.3 trillion revenue collection within reach between July 2023 and end of June 2024.
The entity over the past nine months has collected Shs17.5 trillion out of the current financial year’s Shs25 trillion tax mobilisation target, Mr Musinguzi said, saying full mobilisation of the Shs7.5 trillion in this last quarter is within sight.
In a February 10, 2023, article on its website, the revenue body reported collecting Shs14b surplus in January as a result of better-than-expected yields from Pay As You Earn (PAYE), rental and casino taxes.
The surplus slashed the half-year deficit from Shs94.6b to Shs80b, the institution said.
In an affirmation of capacity to deliver, minister Musasizi, a political supervisor of URA, told legislators during yesterday’s committee sitting that the institution has invested and incentivised its employees well enough to achieve the ambitious target.
Lawmakers cast doubt on the assertion citing, among others, URA’s struggles to collect billions of shillings in taxes on gold alone.
“We need to know how they plan to collect that extra money,” MP Karim Masaba, who represents the Industrial Division of Mbale City, said.
In response, both Mr Musasizi and Mr Musinguzi insisted a foresighted leadership and clear mechanisms are in place to enable them register the desired target.
However, the Nakaseke Central MP Allan Mayanja said the tax body was unlikely to hit the revenue ceiling.
“This would be easy if possibly the entity [was] corrupt[ion]-free, but if we have corruption eating them [URA], then we should not expect much,” he said, adding, “They should instead refocus more energy on tackling the mess at URA because it is only way they will be able to hit the target.”.
