Uganda Revenue Authority has been handed a target of Shs 10.6 trillion for the next financial year as the country prepares to spend colossal sums of money ahead of the 2016 general elections.
According to this year’s National Budget Framework Paper, URA’s target is more than Shs 1 trillion above the task it had last year. Should URA beat its target, the country’s tax to Gross Domestic Product ratio will rise to 13.2 per cent, a figure that would place the country closer to the sub-Saharan average of roughly 15 per cent.
“The tax-GDP-ratio is expected to grow to 13.2 per cent, an increase of 0.5 percentage points on the FY 201415 provisional outturn,” the framework paper says.
The paper notes that the targets will be achieved “through a combination of both policy and administrative measures to raise more revenues. In FY201516, government intends to utilise the national identification [cards] and link the business registration database to URA.”
In the next financial year, which starts in July, government will run on a Shs 18.3tn budget, up from Shs 15 trillion.
“The largest component of the resource envelope is domestic resources (comprising of domestic revenue and net domestic financing), which comprises of 86.1 per cent of next year’s projected resources,” the framework paper says.
The forecasts for the 201516 and the medium term do not include petroleum revenues as the industry is only starting to put in place the infrastructure needed for production.
The paper points out that there will be new tax measures, which are expected to generate Shs 459bn. Government says it will review and increase non-tax revenue collections.
URA has lately been on a charm offensive to lure more Ugandans into the tax net. Tax body officials have visited different businesses and educated them about the need to pay taxes.
The tax body is expected to beat its annual target, the first time it would have done so in more than three years. Meanwhile, external assistance, sometimes known as donor aid, will account for more than $1bn (about Shs 3tn), almost the same as in 201415. Of this money, $395m will be grants while $622m will be concessional loans.
The loan money will be directed towards supporting projects. The country is undertaking a couple of projects such as Karuma and Isimba, and the oil refinery.
Source : The Observer