{UAH} URA posts Shs236bn, cites sluggish economy

In fiscal year 2016/17, URA was asked to collect UGX 13,177.15 Billion based on a set of macro-economic assumptions.

The net revenue collections for FY 2016/17 were UGX 12,719.63 Billion, indicating a 13.26% growth compared to the same period last financial year.

In real terms, a total of UGX 1,488.76 Billion was the additional revenue to the treasury compared to the past financial year.

The overall net revenue collections have averaged at 16.61% growth during the past three Financial Years.

The tax as a percentage of GDP has increased from 12.3 % in FY 2014/15 to 14.05 % in FY 2016/17 registering an increase of 1.72 percentage points over the three year period. In particular, the tax to GDP ratio in FY 2016/17 has grown by 0.55%.

Whereas, the FY 2016/17 outturn was lower than projected collections by UGX 457.51Billion, this performance was realized amidst sluggish economic growth recorded at 3.9% against a projected growth of 5.0%.

This led to an estimated revenue loss of UGX 236.69 Billion. It shall be noted that the larger percentage of the revenue shortfall (82%) was contributed by customs.

Most of the top import yielding items registered a decline in volumes during FY 2016/17.

Regional Performance

Low revenue performance was not only experienced in Uganda. Customs revenue for all the revenue authorities in EAC were below target during the FY 2016/17 with the exception of Burundi Revenue Authority (OBR).

Domestic taxes in Rwanda Revenue Authority (RRA) and OBR performed above target which was not the case for the sister revenue authorities.

Looking at the growth rates, the average EAC revenue performance was 11.8% during the FY 2016/17 with Tanzania registering the highest revenue growth rate while Burundi registered the lowest.

The average EAC tax to GDP ratio was 15.1% during the FY 2016/17 with Kenya registering the highest tax to GDP ratio while Tanzania registered the lowest.

Prosecution

As URA strives to inculcate a taxpaying culture among taxpayers, we shall not shy away from taking any errant taxpayers to court for prosecution to serve as examples to other taxpayers who may harbour certain traits of noncompliance in their tax dealings.

This we shall continue to do it in due regard of the law at hand and tax administration procedures. In this regard, 71 judgements and convictions were secured during the FY 2016/2017.

Out of the 71 judgments, 30 convictions were secured, 33 cases judged in favour of URA and 8 cases judged in favour of taxpayers representing a success rate of 88.7% achieved during the last FY 2016/2017.

In the FY 2016/17, the Supreme Court ruled during the Rabbo Enterprises case that the Tax Appeals Tribunal is the Tribunal of first instance in all tax disputes, and cases can only go to the High Court on appeal. The above Judgment had far reaching ramifications key among them being that; TAT will no longer be starved of tax cases to adjudicate.

Secondly, it meant that all parties involved will benefit from the wider expertise of the Tribunal comprised of accountants, economists, lawyers, etc, and thus issues of mathematics requiring adjudication/reconciliation will be best addressed by experts in the area, with matters going on appeal to High Court on points of law only. This will also help relieve the High Court.

Thirdly, given that judgement, Government will be able to collect 30 percent of the taxes in dispute.

Thus, the abuse of Court process where Taxpayers would run to High Court without paying a percentage of the disputed tax and deliberately delaying cases (revenue) will be no more.

We applaud the URA team (especially legal and customs) for securing such a benchmark resounding court victory.

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Allaah gives the best to those who leave the choice to Him."And if Allah touches you with harm, none can remove it but He, and if He touches you with good, then He is Able to do all things." (6:17)

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