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Kampala,Uganda:MPs interrogate URA Officials,the tax body warns of UGX 4.3 Trillion revenue losses due to budget shortfalls

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Led by John Musinguzi, the Commissioner General, officials from URA on Monday appeared before Parliament’s Finance Committee to present their policy statement for next financial year of 4.3 trillion

URA boss  John Musinguzi shares with members of parliament performance and revenue mobilization initiatives in the Ministerial Policy statement for the FY 2022/23. 

Legislators led by Kiboga East MP Keefa Kiwanuka on Monday interrogated officials from Uganda Revenue Authority (URA) about the funding gaps in the ministerial policy statement for the Financial Year 2022/2023 that they presented before Parliament’s Finance Committee.

URA boss  John Musinguzi shares with members of parliament performance and revenue mobilization initiatives in the Ministerial Policy statement for the FY 2022/23. 

URA boss  John Musinguzi (second left) shares with members of parliament performance and revenue mobilization initiatives in the Ministerial Policy statement for the FY 2022/23. Photo by Ronald Kabuubi/KMA Updates.

Uganda Revenue Authority (URA) officials told MPs that 4.3 trillion Shillings projected revenue is to be foregone due to different unfunded interventions in the coming financial year 2022/2023.

The  technical URA team appearing before the Finance Committee.Photo by Ronald Kabuubi/KMA Updates.

Mr Musinguzi also stated that the process of revenue collection is a complicated one that requires a joint effort.

“It is our prayer that we be given some additional financing support so that we are able to effectively implement the tax administration initiatives that have been lined up and well-articulated in our domestic revenue mobilisation strategy,” he said.

Finance Committee led by Dr.Keefa (R) interrogate URA Officials.Photo by Ronald Kabuubi/KMA Updates.

Critical priorities

Some of the critical unfunded priorities for the Financial Year 2022/2023 that were pointed out included a tax academy (land purchase, design and construction) that needs financial backing of Shs35 billion, office accommodation (including in 22 selected customs and enforcement stations) at Shs27 billion and staff welfare and retention initiatives at Shs81 billion, among others.

 

Mr Paul Omara, the Otuke County MP, asked the Commissioner to give more clarity.

“I would want to find out more information from the Commissioner General because he said if the funding gap of Shs205 billion is not given, this country will forfeit Shs4.3 trillion.”

He added: “Mr chairman, when executives ask for money and they have projected revenue, what we always do is we give them and we hold their feet to the fire.”

In his presentation, Mr John Musinguzi, the Commissioner General for URA, said their (institution’s) budget requirement for the Financial Year 2022/2023 is Shs726 billion with the funding gap estimated at Shs205 billion, an amount which includes budget cuts.

Mr Musinguzi also stated that the process of revenue collection is a complicated one that requires a joint effort.

“It is our prayer that we be given some additional financing support so that we are able to effectively implement the tax administration initiatives that have been lined up and well-articulated in our domestic revenue mobilisation strategy,” he said.

Critical priorities

Finance Committee led by Dr.Keefa (R) interrogate URA Officials.Photo by Ronald Kabuubi/KMA Updates.

Some of the critical unfunded priorities for the Financial Year 2022/2023 that were pointed out included a tax academy (land purchase, design and construction) that needs financial backing of Shs35 billion, office accommodation (including in 22 selected customs and enforcement stations) at Shs27 billion and staff welfare and retention initiatives at Shs81 billion, among others.

Finance Committee Members interrogate URA Officials.Photo by Ronald Kabuubi/KMA Updates.

Finance Committee Members (R) interrogate URA Officials.Photo by Ronald Kabuubi/KMA Updates.

Mr. Musinguzi said in order to do better in their tax collections, they have partnered with Ministry Of Finance and that of Local Government to see how they can track and tap into these taxes.They intend to get Information of taxpayers  on their National IDS.

According to the budget documents before the committee, URA has been allocated 521.43 billion Shillings against its budget requirement of 726.65 billion, hence a funding gap of 205.2 billion.

While presenting the proposed national budget framework paper to Parliament recently, the Minister of State for Finance in charge of Planning, Amos Lugoloobi said that the government is targeting a total revenue collection of 25.54 trillion Shillings to partly finance the 47.2 trillion budget.

Now in his statement to the committee, Musinguzi said that due to the different interventions for which no funding has been appropriated, projected revenue amounting to 4.35 trillion is to be foregone.

He highlighted a 12.73 billion funding gap on tax education, research and strategic engagements and that failure to implement this would result into a loss of 1.844 billion. Musinguzi also said that 46 billion expected revenue is to be foregone due to a funding gap of 10.54 billion towards the Non Intrusive Inspection of Goods at entry points and Surveillance of wider coverage of porous borders.

MPs also learnt that the absence of funding totaling 27.5 billion towards office accommodation in different customs and enforcement stations will lead to a loss of 1.11 trillion Shillings expected revenue. Musinguzi also said that another 1.34 trillion expected revenue is to be foregone due to a funding gap of 35 billion towards the construction of the tax academy.

Finance Committee.Left is the State Minister for Finance  Amos Lugolobi (L) interrogate URA Officials.Photo by Ronald Kabuubi/KMA Updates.

However, a section of MPs led by Butambala County representative, Muhammad Muwanga Kivumbi asked URA officials to explain how the allocation of 205 billion would lead to the collection of 4.3 trillion.

Kivumbi wondered how feasible this would be given that in the past, parliament supported different initiatives from URA but they have failed to increase the tax collections.

Paul Omara, the Otuke County MP also tasked URA to explain how the funding will contribute to the increment in tax revenue. He also wondered whether the 4.3 trillion that is expected to be foregone in revenue is part of the bigger 25 trillion targeted revenue for the coming financial year.

In response, Musinguzi said that apart from the tax academy construction that could take several years, all the other interventions proposed by URA have an immediate impact on the country’s revenue collection.

Amos Lugoloobi, the Minister of State for Planning said that government is constrained and cannot fund only one area of the economy.

Though Mr Musinguzi did not go into details about the money during the Committee sitting, he later told the media that despite the overall funding gap, some of their investments have immediate impact on revenue.

Mr Paul Omara, the Otuke County MP, asked the Commissioner to give more clarity.

“I would want to find out more information from the Commissioner General because he said if the funding gap of Shs205 billion is not given, this country will forfeit Shs4.3 trillion.”

He added: “Mr chairman, when executives ask for money and they have projected revenue, what we always do is we give them and we hold their feet to the fire.”

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