Finance Minister, Matia Kasaija who is worried of the sinking economy.

Government’s tax revenues in September 2018 totaled just over Shs1.2 trillion, registering, a shortfall of Shs9.9 billion and thereby offsetting the surplus recorded in non-tax revenues, according to the Performance of the Economy Report published by the Ministry of Finance Planning and Economic Development (MFPED).

According to the report, tax revenue collections were affected by international trade taxes whose collections were Shs51.6 billion lower than the projected target of Shs578.5 billion for the month of September. “This was due to lower than projected taxable imports during the period that affected both import duty and VAT on imports,” the report reads in part.

The report which tracks the performance of the Ugandan economy monthly, notes that shortfalls of Shs37.7 billion and Shs 21.7 billion were registered in VAT on imports and import duty respectively.

Stories Continues after ad

Meanwhile the report indicates that direct and indirect taxes amounted to Shs64.6 billion and Shs335.1 billion, performing above their respective targets by 2 per cent and 10 per cent respectively. “The performance in direct taxes mainly resulted from surpluses received in Pay As You Earn (PAYE) and earnings from withholding tax on treasury bills while indirect taxes benefited from surpluses on the mobile money levy and phone talk time,” says the report.

However, revenue and grants in September 2018 amounted to about Shs1.3 trillion performing at 94.3 per cent against the target. “This performance was mainly attributed to lower than anticipated grants received which performed at only 48.5 per cent against the target of Shs143.7 billion,” the report says.

Government Expenditure
Preliminary data indicates that Government expenditure during the month totaled to about Shs1.4 trillion, which translates into a performance of 65.0 per cent against the programmed expenditure, the report says. This, the report says, mainly resulted from lower than planned external project disbursements.

Current expenditures in the month of September 2018 were Shs906.1 billion against the program of about Shs1.1 trillion. “This mainly resulted from frontloading of the quarter one expenditure in the first two months of the Quarter coupled with the downward revision of domestic interest payable in the period,” the report says.

Meanwhile development expenditures in the month performed at only 43 per cent of the program or about Shs1 trillion. “This was on account of lower than anticipated external project disbursements and absorption of monies in the external project accounts,” the report says.

Backwards, the total budget value is Shs32.7 trillion for the current financial year (FY) which is 13 per cent up on FY17/18. Domestic revenue will fund 64 percent of the total outgoings, down from 67 per cent budgeted in the prior year. The planned deficit is Shs7, 428 billion (6.6 percent of projected GDP), which will be funded by increased domestic borrowing of Shs1, 785 billion along with external borrowing.

The Uganda Revenue Authority (URA), which is a national tax collector, has been given a tax collection target of Shs16.4 trillion in the current financial year.