International trade shortfalls hurt URA collection targets

 

Cargo trucks. PHOTO BY STEPHEN OTAGE 

By  ISMAIL MUSA LADU

Consistent revenue collection shortfalls registered in international trade partly explain why the national tax body closed its books with a cumulative deficit, amounting to slightly over Shs135 billion.

Although the shortfall registered represents a paltry 1.8 per cent deficit, tax analysts say it has the potential to cause the government planning and budget allocation headache.


For instance, the annual revenue shortfall registered (Shs135 billion) is nearly 15 times the total budget allocated to referral hospitals in the first quarter of the financial year 2013/2014.

According to Uganda Revenue Authority (URA), the deficit is attributed to the shortfalls registered in international trade, an area that the tax collectors grappled with throughout the previous financial.

“Net revenue collections for FY2012/13 were Shs7.1 billion against a target of Shs7.2 billion, reflecting a deficit of Shs135 billion,” URA commissioner general Allen Kagina announced last week while giving annual revenue highlights of the just ended financial year.

Despite a five per cent increase in domestic taxes collections, the tax body registered a revenue deficit due to persistent international trade shortfalls throughout the previous year.

Annual revenue performance record shows that domestic taxes collections for FY2012/13 were Shs4.2 trillion against a target of Shs4 trillion, reflecting a performance of 105 per cent and a surplus Shs202 billion.

International trade taxes for the same year had a target of Shs3 trillion against a target of Shs3.3 trillion, reflecting a performance of 90 per cent and a deficit of 9.5 per cent which is an equivalent of about Shs322 billion.

She also said the decline in cost, insurance and freight values of import in the previous financial year and coupled with a shortfall in petroleum duty, amounting to about Shs100 billion were some of the other reasons explaining why the overall revenue target of Shs7.2 trillion was not achieved