John R. Musinguzi, the Commissioner General of the Uganda Revenue Authority (URA) has committed to strengthening research and analysis within the organisation.
He said this will help to analyse business growth patterns, spot untapped opportunities critically, compare local processes with global best practices, study trends that may impact future revenue, and use data analytics for better decision-making.
The Commissioner General made these remarks yesterday during the extensive review of the revenue performance review for July to December 2024, alongside a delegation from the Ministry of Finance, Planning, and Economic Development (MOFPED) at the URA headquarters in Nakawa.
Musinguzi singled out, among many tax heads, Value Added Tax (VAT) and called for an extensive review of this tax head to ascertain why it wasn’t performing to expectations.
In the released report, VAT collections were UGX 2,314.03 billion against a target of UGX 2,379.95 billion registering a performance of 97.23 percent and a shortfall of UGX 65.92 billion.
“We need to critically assess how to leverage the potential of VAT,” said Musinguzi before adding, “You go to other countries like Rwanda and Tanzania and you’ll find this tax head contributing the majority to their domestic tax coffers.”
The Commissioner General called for further research to assess whether VAT collections could rise with the full rollout of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS).
The president’s directive to halt penalties has been widely seen, and as highlighted in the report, as a major factor restricting the full potential of revenue from this tax.
Francis N. Twinamatsiko, Assistant Commissioner, Tax Policy Department at MoFPED, who led the delegation from the Ministry commended URA for exceeding the half-year revenue target by an impressive UGX 322 billion.
He urged the URA team to stay focused, work even harder, and tackle the second half of the financial year with determination to meet the remaining target.
He also called for comprehensive research on tax holidays and their potential drawbacks, expansion of the tax base into the agricultural sector and consolidation of the Cargo tracking system.
Worthy to note, during the first half of the 2024 financial year, URA had a target of UGX 14,926.85 billion, which represented 47.58% of the total annual goal of UGX 31,369.16 billion.
Impressively, URA exceeded this target, collecting a total of UGX 15,248.99 billion between the same period, marking a performance rate of 102.16%, and surpassing the target by UGX 322.14 billion.
Of this, the Domestic Taxes (DT) department collected UGX 10,131 billion, surpassing their target of UGX 9,874 billion, resulting in a surplus of UGX 257 billion and a performance rate of 102.6%.
On the other hand, the Customs Department collected UGX 5,426 billion, just under the target of UGX 5,454 billion, achieving a performance rate of 99.48% and a shortfall of 0.52% equated to UGX 28.26 billion less than expected.
What’s more remarkable is the significant growth in collections compared to the same period the previous year.
URA saw a 16.08% increase, or an extra UGX 2,112.25 billion when compared to the July-December 2023 period. With the first half of the year completed, the total revenue collection accounted for 48.61% of the annual target, positioning URA well on its way to achieving the full-year goal.
Musinguzi attributed this performance to a flurry of factors, including, but not limited to, a stable and resilient economy, effective administrative measures, and most importantly, the cooperation of patriotic taxpayers, who willingly paid their taxes.
By Dismas Nuwaine
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