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Government had projected to collect revenue worth about Shs1.5 trillion in October 2019 but ended collecting only about Shs1.4 trillion during the month, resulting into a shortfall of 101.7 billion, a report released by the Ministry of Finance, Planning and Economic Development says.

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Dubbed ‘Performance of the Economy Report October 2019’, it says the shortfall was recorded in both tax and non-tax revenue. Of the total Shs1.4 trillion collected during the month, Shs1. 3 trillion was tax revenue while Shs111.5 billion was non-tax revenue. The projected revenue target for Uganda Revenue Authority (URA) in the financial year 2019/20 is about Shs20 trillion.

The report attributes the revenue shortfall partly to underperformance of indirect domestic taxes especially Value Added Tax in the services sector, excise duty on beer, spirits/waragi, soft drinks, and levy on mobile money.

Overall, it says, indirect domestic taxes registered a shortfall of Shs55.6 billion. Direct domestic taxes also registered a shortfall of Shs32.5 billion emanating from underperformance of Pay As You Earn (PAYE), corporate tax and rental income tax.

Similarly, it says taxes on international trade posted a shortfall of Shs12.6 billion as import duty, excise duty and VAT on imports were lower than what had been programmed. This was mainly because of lower dutiable imports than what had been projected for the month of October, 2019.

Government collected Shs111.5 billion in form of non-tax revenue against a target of Shs115.2 billion. This culminated into a shortfall of Shs 3.7 billion as fees, charges and licences collected by Ministries, Departments and Agencies (MDAs) other than URA turned out lower than what had been projected for the month.

Grants

Government received grants worth Shs152.4 billion during the month of October 2019. This was higher than the Shs113.5 billion that had been projected for the month, largely on account of the grant received from African Union for AMISOM. All the Grants received were earmarked for supporting development projects.

Expenditure and Net Lending

Total Government spending in October 2019 amounted to Shs about Shs2.7 trillion which was below the program for the month by Shs789.1 billion. Both development and recurrent expenditure were below their respective projections for the month. Expenditure on recurrent items amounted about Shs1 trillion in October 2019 which was lower than about Shs1.9 trillion programmed as some expenditures were front loaded in the September 2019.

Similarly, development expenditure was lower than programmed for the month by 7 percent, mainly due to the underperformance of externally financed projects during the month. On the other hand, domestic development expenditure was slightly higher than what was projected for the month.