URA given Shs31.5 trillion tax collection target for FY2024/25

Henry Musasizi, Minister of State for Finance has revealed that Uganda Revenue Authority (URA) is expected to collect taxes worth Shs31.574 trillion to finance the 2024/25 national budget, which is an increase of Shs1.9Trn from the current target of Shs29.672Trn, the Authority is expected to collect in FY 2023/24.

Musasizi made the revelation while appearing before Parliament’s Finance Committee where he has led the team from URA to defend their 2024/25 national budget. The Minister said that the recently tabled tax proposals on cement, fuel, land transactions etc are intended to raise revenue to a tune of Shs1.902Trn.

“The projected revenue collection for 2024/25, is Shs31.574Trn, an increment of Shs1.9Trn from the current financial year 2024/25 target of Shs29.672Trn. 

To achieve this projected target, URA will continue to undertake the following reforms; roll out and enforcement of electronic receipting and invoicing solution. The objective of this reform is to ensure that taxpayers are able to keep clear records, file returns in a timely manner and they are able to efficiently assess their VAT. I call upon every Ugandan to support this cause,” said Minister Musasizi.

URA says revenues are to be undermined by exemptions, including incentives for investment promotion.

General poor compliance with tax obligations by taxpayers including the government led to an increase in the stock of arrears stock to 4.632.89 trillion as at end of February 2023.

Of these arrears, Government accounts for 855.93 billion while other taxpayers account for the rest.

A decline in the profitability of firms as a result of low levels of economic activity, as well as delayed government payments, also contribute to lower revenues.

Despite the shortfall, the government is sure there will not be effects on the planned government programs.

Measures put in place include a moratorium on vehicle purchases, saving for critical areas like defense and security, medical delivery vehicles, and ambulances as well as vehicles to enhance revenue collection.

The government has also limited half the budget to workshops and seminars, according to the second budget call circular by Secretary to the Treasury, Ramathan Ggoobi.

Ggoobi also announced the suspension of new borrowing next financial year “and in the short-to-medium term to minimize the share of URA revenues being used to service debt so as to make resources available to finance critical development priorities of the government.”

Spending on travel abroad will be restricted to the President, the Vice President, the Speaker and Deputy Speaker, the Chief Justice, and Deputy Chief Justice, the Prime Minister, and the Principal Judge “and the critical travel for security, arbitration of government cases, and resource mobilization.”