URA Says More Ugandans Lost Jobs, but Revenues Improved

At least 4,030 Ugandans lost their jobs in the first quarter of this financial year – July to October – as companies cut down their wage bill, the Uganda Revenue Authority has said.

According to URA, an analysis of the top 300 taxpayers, both public and private organisations, shows that the number of employees reduced to 118,114 from 122,144 in the three months to October compared to the same period last year. This, the tax body noted, saw a drop in the collections of the Pay as You Earn (PAYE) tax. All workers earning more than 235,000 are expected to remit PAYE.

“For instance, the termination of employment contracts for employees under some government agencies led to a revenue loss of Shs 3.6bn during the period,” Commissioner General Doris Akol told reporters at the URA headquarters in Nakawa on Wednesday. She was presenting the revenue performance for the first quarter of 201415 fiscal year.

URA’s findings point to a tough economic year, where some sectors, such as commercial banks, recorded losses the previous year and might still be facing the same problems this year. A couple of companies have closed business while others have scaled down on the operations in the country, laying off a substantive number of workers.

In September, for instance, British American Tobacco Uganda closed down its tobacco leaf purchasing wing. About 138 employees were laid off. Firms like Ban Cafe have closed all their outlets in town. Other popular bars like Mish Mash, Alfredo’s, have also folded.

Yet URA revenue collections for the first quarter show that not all is bleak. The tax body achieved a performance rate of 99.8 per cent. The tax body collected net revenues of Shs 2.8tn, posting a deficit of Shs 470m. This financial year, URA has a target of Shs 9.5tn.

Akol said domestic revenues performed impressively, realising a more than 100 per cent performance rate. The tax body recorded an improvement in tax from corporate companies’ profits.

“A number of companies that did not declare and pay provisional tax during the last financial year have made remittances of this tax for the same period this financial year,” said URA in a statement.

Tax arrears amounting to Shs 20.5bn were realised from public administration, mining, and quarrying, the revenue body said. Tax withheld on foreign transactions, management fees and government payments to suppliers has also improved.

Revenue collected on mobile money transfers and the sugar sector have also improved, owing to the new taxes which were introduced by the Finance minister, Maria Kiwanuka, in the 201415 budget.

For mobile money, a 10 per cent levy was slapped on the withdrawal charges, in addition to a sending charge of 10 per cent. It yielded Shs 9.72bn. Mobile money has become one of the most used medium of transaction, with its transactions valued at Shs 18.6tn as at end of last year, according to Bank of Uganda.

On the sugar sector, the levy increased from Shs 25 to Shs 50 per kilo. This has so far yielded Shs 2.54bn. The international tax heads were also promising. Import goods that attract Value Added Tax grew. URA attributed this to efficient administrative measures. Meanwhile, fuel imports also increased with a total volume growth of nine per cent.

URA said it would focus on special PAYE audits and monitor key sectors, including financial, manufacturing, energy, and construction.

Source : The Observer

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