For the first quarter of FY 2021/22, Uganda Revenue Authority (URA) collected net revenue of UGX 4.459 trillion posting a growth of 9.57 percent in comparison to the FY 2020/21. This was, however, short of the targeted UGX 4.9 trillion by UGX 499.49 billion
In nominal terms, this reflects a growth in revenue of UGX 389.47 billion.
Speaking during the press brief to announce the results today, URA Commissioner General John Rujoki Musinguzi said: “Having achieved a growth in revenue of 14.99% in the FY 2020/21, URA is expected to collect UGX. 22.3 trillion in the FY 2021/22, which is UGX 3.1 trillion over and above last year’s collections.”
Domestic revenue collections during the quarter were UGX 2,655.56 billion, translating in growth of 8.11 percent (UGX 199.10 billion) compared to the same period in FY 2020/21. This, was short of the target of UGX 3,096.31 billion by UGX 440.75 billion.
On the other hand, during the first quarter of FY 2021/22, customs revenue collections were UGX 1.8 trillion against a target of UGX 1.9 trillion, registering a growth of 8.88 percent (UGX 152.14 billion) in comparison to FY 2020/21. However, the collections were UGX 106.54 billion below target.
Sector contribution
In terms of sectors, 74.02 percent of the revenue was generated from the top 5 sectors, the wholesale and retail trade sector being the biggest contributor with UGX 1.36 trillion (30.10 percent).
The manufacturing sector followed with UGX 1 trillion (23.61percent), the financial activities contributed UGX 353.66 billion (7.82 percent), while UGX 338.36 billion (2.65 percent) was generated from the information and communication sector and UGX 202.98 billion (4.49 percent) from public administration.
On a year-to-year basis, the Arts, Entertainment and Recreation sector grew by 97.24% mainly due to arrears recovery of UGX 7.22 Billion from the gaming activities;
Water supply, sewerage, waste management and remediation activities grew by 64.97% due to payment of arrears for the period between February 2021 and August 2021 worth UGX 9.62 billion paid in the July to September.
The Mining and Quarrying sector grew by 41.69% mainly arising from out of court settlements from Oil and Gas activities.
On the other hand, there was a decline in revenue collected from some sectors in the first quarter of FY 2021/22, compared to same period in FY 2020/21.
Revenue from the Electricity, Gas, Steam and Air conditioning supply sector declined by 17.31%, the Construction sector declined by 15.95% and the Real estate sector declined by 4.67%. This decline is partly explained by continued Government restriction on some sectors which has affected the supply chains and didn’t not yield any revenue in the period. However, gold exporters are still in negotiation with the government regarding this tax having disputed the applicable rate. This largely explains the deficit of UGX 27.30 billion in export levy.
Enabling factors
The growth of 9.57% is partly attributed to the URA administrative initiatives like arrears management which resulted into a revenue recovery of UGX. 322.63 Billion and cargo management to curb under and miss declaration which led to a revenue gain of UGX. 11.51 Billion. These supplemented collections from normal flows.
The trend analysis for the last five years, indicates continuous growth in the net revenue collections. The highest year to year growth was observed in the FY 2018/19 (17.82%) and the lowest recorded in FY 2020/21 (1.62%) which is mainly accredited to the adverse impact of COVID-19 as shown in the figure below. In FY 2021/22, there are signs of economic recovery as portrayed by a growth in revenue of 9.57%.
During the quarter, a number of Tax Administrative Efficiency measures were implemented which resulted in improved revenue. They are;
Expansion of the taxpayer register
According to the authority, during the quarter, 65,666 new taxpayers were added to the taxpayer register. By the end of September 2021, the taxpayer register had 1,849,159 taxpayers.
Customs Enforcement
These led to a recovery of UGX. 22.38 Billion as a consequence of 2,161 seizures. 1,894 seizures were issued on dutiable goods and 267 seizures were issued on non-dutiable goods. Major offences were due to under-declaration at 70.08%, mis-declaration at 13.62%, other offences3 at 9.53%, out-right smuggling at 3.65%, undervaluation at 2.15% and mis-classification 0.97%. The most at-risk goods during the first quarter of FY 2021/22 were: assorted items, motor vehicle spare parts, textile material, garments, hardware, cosmetics, electronics, stationary, shoes and kitchen ware.
Litigation
During the quarter, 25 judgments/rulings were received out of which 21 cases were ruled in favor of URA, three (3) were in favor of the taxpayers while one (1) was a split decision thus registering a success rate of 84%.
According to Patience Rubagumya, the Commissioner for Legal Services and Board Affairs, the cases won by URA amounted to UGX 200 million, of which UGX150 million has so far be realized.
Tax Investigation
The investigation efforts resulted into the completion of 38 cases with recoverable revenue worth UGX. 24.28 Billion
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The revenue target for the remaining period of the FY 2021/2022 (October 2021 to June 2022) is UGX. 17.4 trillion, which is 77.82% of the annual target of UGX. 22.3 trillion out which URA is targeting UGX. 6.1 trillion for quarter two.
Strategic Interventions
During the period October 2021 to June 2022 of the FY 2021/22, Musinguzi said that URA will continue to implement a number reforms to increase on revenue collections and tax to GDP ratio to 14.99 percent. These include;
Use of Alternative Dispute Resolution (ADR) to amicably resolve tax disputes with taxpayers.
“We have embarked on a service-centric approach by listening more to the concerns of the taxpayers and being more responsive to clients concerns. This is also cost-efficient because it reduces litigation costs and takes a shorter time to realize revenue. We are also encouraging taxpayers 11 to embrace the voluntary disclosure avenue by doing a tax health check and cleaning their tax account without waiting for us to penalize them,” Rujoki said.
Digital Tax Stamps and Electronic Fiscal Devices
In a bid to increase the effectiveness and efficiency of Tax Administration, URA introduced Digital Tax Stamps and Electronic Fiscal Devices to enhance service delivery and voluntary compliance. In the remaining 9 months, the taxman says it will focus on implementation of approved structures to ensure sustainability, expand on the traced and tracked products beyond the current 8 products (Cigarettes, beers, sodas, water, wines, spirits, sugar and cement). The additional products include cooking oil, fruit and vegetable juices, non-alcoholic, alcoholic and other fermented products.
“URA will continue to engage all relevant stakeholders to reduce on the current legal disputes and appeals,” URA says.
To further strengthen the implementation of Electronic Fiscal Devices, URA adds that it will continue to engage stakeholders on the documented Electronic Dispenser Controls (EDC) which is high level architecture for validation of fuel stations, enhance system integration and document process guide books for all EFRIS modules.
Domestic Resource Mobilization Strategy
URA states that it will continue to implement domestic revenue mobilization strategies like; upgrading e-tax system to be able to accommodate task at nation level, upgrading the URA data center, procurement of scanners, electronic cargo and driver trucking systems (RECDTS).
Additionally, the authority will continue to improve and strengthen stakeholder relations and engagements with the private sector, Government Agencies, and external Revenue Agencies in order to leverage each other’s strength in achieving our mandate.
Key areas of collaboration mentioned are in information exchange, capacity development, and system integrations to not only expand our tax base but also to accurately determine and assess taxes. These, and much more are meant to support clients through a multi-faceted approach.
WhatsApp and web chat service enhancement:
To further enhance client service support, URA has introduced two new service support channels to help taxpayers enjoy seamless service support and ease of compliance. These are The Web chat available on the URA web portal and The URA Whatsapp number, 0772-140000. that was launched today. The AskURA app is also on IOS to enable Apple users access the URA office from anywhere.
Mobile Tax office: Launched in July, the mobile tax office is meant to further intensify tax education and outreach services. To date, the Tujenge bus has combed the remote areas in Kamuli, Iganga, Mbale and Soroti. The total number of taxpayer visits conducted in just one month are 1,538 and 1,200 registered taxpayers.
URA TV to create and distribute audio-visual tax education content by way of a vast array of programs like 30 tax education webinars, tax skits, investment programs, televised tax edutainment dramas among others. Plans are underway to make the television- now available online and on demand accessible on open broadcast free to air platforms.
Profiling and Recognising Compliant Taxpayers
URA will profile and publish 30 most compliant taxpayers per region from the 6 jurisdictional regions of Uganda to further celebrate the most economic heroes of Uganda who have not only worked hard to sustain the economy but also gone ahead to contribute regularly and significantly to the national revenue mobilization efforts over the years.
Taxpayers Appreciation Season 2021
The Taxpayers Appreciation Season is an annual event dedicated to recognizing, rewarding and appreciating compliant taxpayers to inculcate a culture of voluntary compliance among all Ugandans.
The Taxpayers Appreciation Season will run up to December 2021 to allow URA reach out to more taxpayers under the theme: “30 years of Developing Uganda Together.” The Season will culminate in the Taxpayers Appreciation Awards Gala where 40 Taxpayers who have stood tall on the compliance ladder the previous financial year and those that have walked with us over the 30 years of URA’s existence will be recognized at a national platform.
E-Bomba Ya Business Summit
The E- Bomba Ya Business Summit has proven to be a key component of the Taxpayers Appreciation season festivities. Now running for the 3rd year in a row, the summit runs every Friday from 10:00am to Midday for a perio
