Uganda Revenue Authority (URA) realized less revenue last month with both domestic and international taxes performing poorly.
According to the ministry of Finance filings for the month, collections in August were below target by Shs 149 billion. Overall, URA collected Shs 1.4 trillion in August, out of which Shs 1.3 trillion was tax revenues.
All tax heads - corporation taxes, PAYE, value-added taxes and import taxes registered a shortfall. This is an indicator that the economy has not picked up as the financial year 2019/20 has just started. Government's spending during the month was also below target which means many businesses that depend on government to make money by supplying it were not able to do so.
International taxes had a shortfall of Shs 70.62 billion, the biggest of all. This is because of the lower imports than had been projected. Domestic direct taxes registered a Shs 10.2bn shortfall, mainly because of lower collections on rental income and corporation taxes during the month.
Non-tax-revenue was also below target. URA collected Shs 88 billion against the Shs 143 billion target for August. URA is expected to collect Shs 20 trillion in the 2019/20 financial year. Government will run a budget of Shs 40.1tn. If tax collections continue to perform poorly, it means that the government will be compelled to borrow more domestically to fund budget needs.