Uganda’s revenue in decline amid low yield In telecom, customs

By Timothy Sibasi, timothy.sibasi@alleastafrica.com

KAMPALA – The Ugandn Revenue Authority (URA) has fallen short of its quarter one target revenue collection by Shs 1.26 trillion.

Figures from the tax body indicate that Shs 3.14 trillion was collected in the first quarter (July to September this year), compared to the target of Shs 3.27 trillion. The first quarter collections represent 20.89% of the annual target of Shs 15 trillion.

The shortfall is largely attributed to a year on year decline in revenue contributions from other major sectors like ICT, financial, electricity, public and mining.

The telecommunications sector has also continued to register a negative slope in prices for the second year in a row of 8.1 % following a minus 12.7 percent realized at the end of September last year.

Meanwhile, URA says that this has negatively affected excise revenue collections and VAT sales. Despite a 8.1% drop in prices, the telecom sector has grown by a meagre 3.6% due to a surge in demand for communication services.

Between July and September, tax yields from major custom items also declined along with a downward revision of growth in international trade taxes from 15.8% to 11.9%. Re-exports rose from Shs 355 billion to Shs 405 billion in the three month period.

The wholesale sector contributed the most to the quarterly collections by 34.2% while the manufacturing sector contributed 27.6% to the total revenue. Both sectors combined generated over 61% of the total revenue during the three month period.

Year on year, the manufacturing and wholesale sectors have grown by 1.8% anf 6% in the first quarter of the 2016/17 and 2017/18.

Nonetheless, URA reported that there was a 11.7% growth in revenue collection for the three months period into the 2017/18 financial year compared to the same period in the previous fiscal year.

The quarterly performace shows that in the month of September alone, URA raised Shs 1.44 trillion in net revenue.

I am happy to report that in the month of September 2017, net revenue collections were Shs 1.14 trillion. This was Shs 35.42 trillion above target registering a performance rate of 103.19%,” the URA Commissioner Doris Akol said.

The net revenue performance trend shows an increasing trend with the highest average growth rates at 14.6% for the FY 2013/14 and FY2017/18 respectively.

At a regional level, all the EAC countries performed below target in the first quarter in both customs and domestic revenue.