By Silvia Nyambura
According to economists, Uganda’s tax revenues have to grow at over 27% if the tax base is to recover from the Ushs 246 billion shortfall recorded in the first half of financial year 2013/2014.
The revelation came as the national tax body the Uganda Revenue Authority reported a revenue performance of 14% which registered Ushs 3.8 trillion compared to the target of Ushs 4.1 trillion for the period under review.
According to the URA Commissioner General Allen Kagina who was announcing the results at the Authority’s headquarters in Nakawa on February 6, 2014, this is the largest shortfall witnessed in recent years and it has been attributed to a slowdown in economic performance, decline in GDP performance in the first quarter of the financial year as well as decline in corporation tax which recorded a Ushs 161 billion shortfall.
Value Added Tax (VAT) recorded Ushs 118 billion shortfall while withholding tax recorded Ushs 30 billion shortfall. However PAYE and Tax on bank interest performed well recording Ushs 32 billion and Ushs 29 billion surpluses respectively. The manufacturing sector was one of the top sectors for revenue contribution recording Ushs 864 billion which translated to 26% of total revenue collections.
Commenting on the reduced revenue collection, Kagina said, “Increased capital investments made by the key sectors in the economy like beer and steel industries which recently commissioned plants worth US$ 17 million increased the companies allowable deductions which reduced their profit and corporation tax paid. Many companies that were previously posting profits declared smaller profits or losses citing slow economic performance and low access to affordable credit,
