The domestic revenues revenue collections during July amounted to about Shs1.160 trillion in July posting a surplus of Shs. 35.8 billion against the programmed target as both tax and non-tax revenues performed above their respective targets, says the latest Performance of the Economy Report published by the Ministry of Finance Planning and Economic Development.
According to the report, the realised revenues registered a 25 per cent increment when compared to July 2017. Tax revenue collections amounted to about Shs1.1 trillion attaining a surplus of Shs34.3 billion against the projected target.
The report attributes the extra revenue to direct domestic tax and taxes on international trade which registered surpluses of Shs 3.9 billion and Shs 30.4 billion respectively.
The performance in direct taxes was partly due to salary increments for some public officers which resulted into higher than anticipated PAYE remittances from government. The surplus in international trade taxes during the month was partly due to higher than anticipated dutiable imports. Non-tax revenues amounted to Shs35.0 billion posting a surplus of Shs1.5 billion against the programmed target.
Total expenditure for the month amounted to about Shs1.867 trillion, though it fell short of the expenditure by Shs. 726 billion. “This performance was majorly on account of lower than projected spending on domestic and externally financed projects,” says the report.
Revenue and grants amounted to Shs. 1,196.6 billion registering a shortfall of Shs. 42.3 billion against the target for the month. According to the report, the shortfall resulted from lower than anticipated inflows of grants which more than offset the surplus of Shs. 35.8 billon in domestic revenues.
The total government expenditure during the month amounted of about Shs1.867 trillion was an equivalent of 72.0 percent of the projected expenditure level. The report attributes the performance mainly to lower than anticipated spending on interest payments and development expenditure which performed at 83.3 percent and 47.4 percent respectively against their programed spending levels for the month.
However, wages and salaries payments were close to target as they amounted to Shs337.4 billion exceeding the programed level by Shs3.1 billion. Development expenditure amounted to Shs667.9 billion against the target of Shs1,408.3 billion. The performance was mainly attributed to lower than projected disbursements in externally financed projects. Preliminary out-turns show a performance of only 16.2 per cent of the target for the month.
Exchange Rates
Considering monthly averages, all EAC Partner States’ currencies were fairly stable against the US dollar in July 2018; with the exception of the Ugandan shilling which greatly appreciated in July 2018 having moved from a high depreciation rate in June 2018.
Within the EAC region, only the Uganda and Kenyan shillings gained value against the US dollar during the month, registering appreciation rates of 2.1 per cent and 0.4 per cent respectively compared to the previous month.
The appreciation of the Ugandan shilling was partly explained by an influx of off-shore players attracted by increases in interest rates on government securities. The Burundi franc and Rwandese franc depreciated at 0.1 per cent and 0.3 per cent respectively as in the previous month; while the Tanzania shilling depreciated at 0.1 per cent.
Uganda’s Trade balance with the EAC Partner States during June 2018, showed a surplus having exported merchandise worth US $137.4 million and imported US $69.6 million from within the EAC region.
At country specific level, Uganda traded at a surplus with Kenya, Rwanda and South Sudan during the month while deficits were recorded for Tanzania and Burundi. Kenya was Uganda’s biggest trading partner compared to the other EAC Partner States, with the highest value of imports US $35.5 million and largest market for Uganda’s exports US $73.6 million.