KAMPALA – Uganda Revenue Authority – URA managed to hit its target of revenue collection with a surplus of UGX 57.48 billion in the Financial Year 2022/23, John Musinguzi, Commissioner General has revealed.
He told the press on Wednesday that they were mandated to collect net revenue target of UGX 25,151.57 billion but they surpassed it to collect UGX 25,209.05 billion.
“This represents a remarkable 100.23 per cent performance with a surplus of UGX 57.48 billion.”
Presenting the Authority’s performance report for the concluded financial year 2022/23, Mr. Musinguzi noted that they recorded a significant revenue growth of 16.40 per cent (UGX 3,551.04 billion) compared to the previous financial year.
“Over the past five years, there has been a consistent increase in net revenue collections. However, in the fiscal year 2019/20, growth was slower due to the impact of COVID-19. But the most recent data shows that the economy has performed better than expected, with a 5.3% growth in real terms during FY2022/23, compared to 4.6% growth in FY2021/22, according to the latest GDP figures.”
Domestic tax revenue collection
In the fiscal year of 2022/23, the total revenue collected was UGX 16,425.41 billion, surpassing the target of UGX 16,188.51 billion by 101.46% and resulting in a surplus of UGX 236.89 billion.
He said that this represents a growth of UGX 2,761.52 billion (20.21%) compared to the previous fiscal year. He revealed that direct domestic taxes collected exceeded the target with a surplus of UGX 724.62 billion, while Non-tax revenue, including stamp duty and embossing fees, generated a surplus of UGX 65.81 billion. However, indirect domestic taxes fell short of the target, with a deficit of UGX 553.54 billion.
International trade tax collections
Here, Musinguzi told the press that a total of UGX 9,326.64 billion was collected, which is slightly below the target of UGX 9,462.70 billion.
“This still shows a decent performance of 98.56%. There was a notable increase in revenue growth of UGX 892.47 billion (10.68%) compared to the previous fiscal year. However, the collections fell short of the target by UGX 136.05 billion.”
He revealed that import duty registered a surplus of UGX 275 17 billion, as did temporary road licenses with a surplus of UGX 12.66 billion, and export levy with a surplus of UGX 3.75 billion.
However, he said that several tax categories incurred shortfalls: VAT on imports fell short by UGX 161.57 billion, petroleum duty by UGX 152.89 billion, excise duty by UGX 55.35 billion, withholding tax by UGX 23.79 billion, infrastructure levy by UGX 19.10 billion, and surcharge by UGX 14.93 billion.
Reasons for Revenue Performance in FY 2022/23
Commissioner General attributed the performance to continued and sustained economic growth, “the direct domestic taxes of UGX 724.62 in excess of the target, thanks to a steady and consistent economic growth of 5.3%. This growth was achieved through increased job creation and constructive return on investment.”
Two, was enhanced administrative measures. He said that in order to improve administrative procedures, a number of measures were implemented including increasing operational hours, improving arrears management, engaging with taxpayers to encourage compliance, utilising mobile offices, increasing awareness through sensitisation efforts, using alternative dispute resolution, implementing compliance initiatives such as audits and vetting, using information to inform decision-making, conducting tax investigations, implementing a new performance management approach, and using technology in custom processes.
“These initiatives resulted in a significant growth rate of 16.40% in FY 2022/23.”
ADMINISTRATIVE ACHIEVEMENTS in FY 2022/23
Expansion of Tax Base
He reported that in the fiscal year 2022/23, the number of taxpayers registered increased by 882,286, indicating a growth of 33.70%. By the end of the fiscal year, the total number of taxpayers on the register was 3,500,294. Among them, 194,143 were non-individuals, while 3,306,151 were individual taxpayers.
“The growth is attributed to the success of the Tax Registration Expansion Program (TREP), which used intensive fieldwork and data-driven registrations to achieve these results.”
Mr. Musinguzi noted that throughout the fiscal year 2022/23, customs enforcement operations were carried out across the country, resulting in the recovery of a total of UGX 132.77 billion through 14,187 seizures. He says that the majority of these recoveries were attributed to various offenses, including under-declaration at 42.61%, false documentation at 11.70%, undervaluation at 4.54%, outright smuggling at 7.11%, misclassification at 1.12%, concealment at 0.60%, and other offenses at 32.96%.
Recoveries during the fiscal year 2022/23 totalled UGX 1991.39 billion, with government commitments being fulfilled to the tune of UGX 713.47 billion. The total recoveries for non-government arrears were UGX 1,277.92 billion.
Litigation & Debt Recovery
In the fiscal year of 2022/23, a total of UGX 130.50 billion was recovered, surpassing the target of UGX 80.00 billion by 163.13 per cent. Additionally, the litigation success rate for the same period was 85.33 per cent. As for litigation, a summary is provided of the judgments and rulings, settled cases, and convictions obtained during the review period.
Tax Investigation compliance initiatives
He noted that in the fiscal year 2022/23, several measures were taken to improve compliance, including the use of intelligence, investigations, information sharing, scientific analysis, and forensic document examination, all which were aimed at discouraging tax fraud and systematic non-compliance while also identifying revenue enhancement opportunities. “As a result of these investigations, recoverable revenue totaling UGX 174.64 billion was identified.”
Implementation of EFRIS & DTS
With the implementation of the Digital Tax Solution/Stamps (DTS) and increased enforcement activities, URA successfully onboarded new taxpayers and improved their declarations. The DTS register currently has 894 clients, and URA is conducting more inspections to bring in more clients. This is expected to result in more Local Excise Duty (LED) registration, leading to better declarations.
Going forward, the Authority has been tasked to collect UGX 29,218.98 billion in the fiscal year 2023/24, which is a noteworthy increase of UGX 4,067.41 billion (16.17%) compared to the previous year.
Mr. Musinguzi is optimistic that this target can be achieved given the expected economic growth of 5.5-6.0% and the revenue growth achieved in the previous year.
“To ensure that we meet this target, we have devised a comprehensive plan that includes measures such as strengthening tax administration and compliance, engaging with stakeholders, providing extensive education, improving staff accountability through performance management, implementing digital stamps and EFRIS, enhancing the use of data analytics, artificial intelligence, and risk management to identify audit cases, and revenue leakages, using alternative dispute resolution, improving staff capacity and productivity, strengthening science investigations, and managing borders effectively. With these initiatives in place, we are confident that we can achieve our goals and contribute to the growth and development of our economy.”