KAMPALA – The surge in revenue collection has prompted the Uganda Revenue Authority (URA) to propose to Parliament to consider imposing tax on the wealthy people in the country.
The proposal was fronted by John Musinguzi, the URA Commissioner General while appearing before Parliament’s National Economy Committee on Monday where the tax body officials had appeared to discuss the impact of coronavirus on the economy.
Musinguzi said, “Consider imposing a wealth tax. This will help moblise and reduce income inequality that is bound to increase and impact COVID-19. Wealth taxation would be the possible response to this type of situation because it is least likely to drag on economic recovery and will impose less or no burden on the poor.”
Musinguzi defended his decision saying it would also serve to address the growing accumulation of wealth in a very small number of hands which has been observed while analysing the databases.
He further told Parliament that due to the slowdown in economic activities as a result of COVID-19, the Authority together with the Ministry of Finance revised the revenue projections to Shs19.878Trn compared to the initially projected Shs21.810Trn.
According to URA, the COVID-19 pandemic has affected its revenue collections pointing out Non tax revenue collections including appropriation in aid and in May 2020, only Shs9.86Bn was collected against the target of Shs95.01Bn, hence posting a performance rate of 10.38% and a deficit Shs85.14Bn.
The Authority also revealed that imports declined by Shs1.064Trn from Shs8.848Trn realized during the same period in 2018/19 with the most outstanding decline in imports values experienced in April of Shs766.42mainly because of the global lockdown immediate shocks and effects that affected normal flow of the value.
URA also recorded a decline in the production of excisable products over the 4months with the most impacted month being May 2020 with items most affected being wines, soft drinks, cosmetics and motor vehicle lubricants.