Uganda Revenue Authority registers sh57Billlion surplus in 2022/23 Financial year

Uganda Revenue Authority has had a net revenue target of Ush25,151.57 billion in the Financial Year 2022/23, surpassed and collected Ush 25,209.05 billion.

According to John Musinguzi Rujoki, the URA Commissioner General who read the performance report at a Press Conference in Kampala, the remarkable performance represented an 100.23% performance with a surplus of UGX 57.48 billion.

“The year recorded a significant revenue growth of 16.40 per cent (UGX 3,551.04 billion) compared to the previous financial year, thanks to the stable and resilient economic performance, enhanced administrative measures, and the cooperation of patriotic taxpayers,” said Musinguzi.

He said 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,” he said.

Domestic tax revenue collection

In the fiscal year of 2022/23, Musinguzi said the total revenue collected was UGX 16,425.41 billion, surpassing the target of UGX 16,188.51 billion by 101.46 per cent and resulting in a surplus of UGX 236.89 billion.

“This represents a growth of UGX 2,761.52 billion (20.21 per cent) compared to the previous fiscal year.

“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,” he said.

International trade tax collections

Musinguzi said that in terms of international tax collections, a total of UGX 9,326.64 billion was collected, which was slightly below the target of UGX 9,462.70 billion.

“This still shows a decent performance of 98.56 per cent. There was a notable increase in revenue growth of UGX 892.47 billion (10.68 per cent) compared to the previous fiscal year. However, the collections fell short of the target by UGX 136.05 billion,” said the Commissioner General.

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).

He said however 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

Musinguzi said that there was Continued and sustained economic growth as one of the reasons for the Financial Year 2022/2023 performance.

“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,” he said.

 Musinguzi mentioned the other reason for the remarkable performance as due to enhanced administrative measures that was done through implementation of a number of measures.

“These included 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 per cent in FY 2022/23,” he said.

Musinguzi said that in the Financial Year 2022/23, they also made some administrative achievements by putting in place a number of strategies to encourage taxpayers to comply with regulations, expand the tax base, and facilitate revenue collection.

These initiatives included Expansion of Tax Base where 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,” stressed Musinguzi.

Enforcement Interventions were also made throughout the fiscal year 2022/23 with 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.

Musinguzi said the majority of these recoveries were attributed to various offenses, including under-declaration at 42.61 per cent, mis-description/false documentation at 11.70 per cent, undervaluation at 4.54 per cent, outright smuggling at 7.11 per cent, misclassification at 1.12 per cent, concealment at 0.60 per cent, and other offenses at 32.96 per cent.

Arrears management was also one of the areas Musinguzi said boosted the remarkable revenue performance with 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 and Debt Recovery was another area that upped revenue collection in the fiscal year of 2022/23, where 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 was another area that boosted revenue performance in the fiscal year 2022/23 where several measures were taken to improve compliance.

“These measures involved the use of intelligence, investigations, information sharing, scientific analysis, and forensic document examination. The goal is to discourage tax fraud and systematic non-compliance while also identifying revenue enhancement opportunities. As a result of these investigations, recoverable revenue totalling UGX 174.64 billion was identified,” said Musinguzi.

Musinguzi said implementation of EFRIS & Digital Tax Stamps and fighting corruption were the other areas that helped revenue collection growth.

BY PAUL TENTENA