The manufacturing sector topped the list of the biggest taxpayers for financial year 2014/15, Uganda Revenue Authority announced last week.
The sector increased its share of contribution to the treasury to 30 per cent in the financial year 2014/205 from 22.9 per cent in the 2013/14 financial year. URA reported a Shs 139bn surplus for 2014/15, the highest ever in the history of the authority – beating the Shs 92bn, which was realized in the 2004/5 year.
The revenue body collected Shs 9.7tn against the target of Shs 9.5tn. Both domestic and international taxes performed above target.
Crown beverages, Century bottling, cement producers Hima and Tororo, beer firms Uganda Breweries and Nile Breweries are some of the big taxpayers in the manufacturing industry. Others are Unilever Uganda Limited and the Nice House of Plastics.
Nile Breweries opened its Mbarara factory in 2013, which is estimated at $90.6m. Doris Akol, the commissioner general at URA, described the surplus as a “huge achievement derived from increased efficiency in revenue administration.”
She added: “Deliberate increase in stakeholder and taxpayer engagements through tax clinics, tax education drives… helped us reach more taxpayers.”
Meanwhile, the wholesale and retail trade sector – shops and supermarkets – came second, posting a 23 per cent contribution. The financial and insurance sector contributed 10.9 per cent, while the communications industry contributed 10.3 per cent.
The top five sectors contributed 80 per cent of the tax and the rest of the sectors, including agriculture, accounted for a paltry 20 per cent. Regionally, Uganda registered the highest growth in revenues while Tanzania had the lowest. Rwanda came second.
Allan Mugisha, a tax expert at Ernst and Young, said Uganda’s economy was poised to continue growing. However, there have been concerns over the depreciation of the shilling and the high interest rates on credit, both of which could dampen economic growth.
Mugisha hopes that “the infrastructure investment will maintain the growth momentum.” Construction works on Isimba and Karuma dams have started while a couple of roads such as the Kampala Entebbe expressway are also under construction.
Mugisha said a push for local content in the construction sector could bolster growth. URA is expected to collect Shs 11.3tn this financial year mainly through improving efficiency.