Overview:
With Uganda's tax-to-GDP ratio that keeps oscillating between 11% and 13%, Uganda has one of the lowest tax-to-GDP ratios in the world which is even below Sub Sahara's average of 16%.
The Uganda Revenue Authority (URA) says it has been given a revenue collection target of UGX 29.3 trillion for the next financial year of 2023/2024.
The sh29.3 trillion target for 2023/2024, from sh25.5 trillion target for the current financial year of 2022/2023 means that an extra sh3.8 trillion would have to be collected next financial year.
With Uganda’s tax-to-GDP ratio that keeps oscillating between 11% and 13%, Uganda has one of the lowest tax-to-GDP ratios in the world which is even below Sub Sahara’s average of 16%.
The revelation was made by URA Commissioner General, Mr John Musinguzi, while presenting their 2023/24 ministerial policy statement to Parliament’s Committee on Finance on Thursday.
“The total revenues are projected at Shs29.3 trillion. The ultimate goal is to achieve the tax Gross Domestic Product (GDP) ratio of about 18 percent at the end of the domestic revenue mobilisation strategy implementation,” said Mr Musinguzi.
“I would like to urge all the stakeholders,” Mr Musinguzi said in a plea to lawmakers, “to support us as we can only effectively deliver on our mandate [with better] mobilisation of revenue.”
The Shs29.3 trillion new tax target that URA has set for itself next financial year is the exact figure a highly-placed source told this newspaper six months ago as the realistic revenue the taxman would realise annually had it not been for leak of collections through under-taxation, questionable tax waivers in billions of shillings and manipulation of import and export records.
State Minister for Finance (General Duties), Mr Henry Musasizi told MPs that a foresighted leadership and clear mechanisms are in place to enable them register the desired target.
However, the Nakaseke Central MP Allan Mayanja said the tax body was unlikely to hit the revenue ceiling.
“This would be easy if possibly the entity [was] corrupt[ion]-free, but if we have corruption eating them [URA], then we should not expect much,” he said, adding, “They should instead refocus more energy on tackling the mess at URA because it is only way they will be able to hit the target.