ECONOMY: Uganda’s tax arrears hit UGX3.6T mark.

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The just released 2020/2021 national budget framework paper by Parliament’s Budget Committee has painted a grim picture on Uganda’s tax burden showing that tax arrears have now reached Shs3.624Trn.

The report that was presented on the floor by Patrick Isiagi, Vice-Chairperson Budget Committee highlighted that the stock of tax arrears is steadily growing from Shs1.005T in FY2013/2014 to Shs3.624T as at end of FY2018/19.

Isiagi remarked, “The stock of tax arrears has grown effectively by Shs2.619T or by 260.5% in five years, despite some recoveries by URA.”

It should be recalled that last year, the Budget Committee sounded alarm over the increasing debt stock that was recorded at Shs2.6T with the Committee describing the amount as worrying trend and that the amount Uganda Revenue Authority is yet to collect is colossal which if paid would significantly reduce the stress on Uganda’s budget.

The Committee even called on Speaker of Parliament to institute a Committee to probe the tax arrears after URA told MPs was caused by the failure of the government to pay suppliers of goods and services provided and in some incidences, URA has been forced to release goods before taxes are cleared.

In a related development, URA is seeking Shs500M for the purchase of drones, body bugs and worn cameras for the customs enforcement team to enable them fight smuggling which is causing loss of revenue to the government to government.

The Authority argued that the items if provided would enable the enforcement team to monitor the porous borders as well as enforcement officers in the execution of their duties.

In the 2020/2021 national budget, the total resource inflow is projected to reduce by 2% from Shs40.488Trn in FY 20l9/2020 to Shs39.641Trn in 2020/2021. The reduction in resource inflow is mainly attributed to a reduction in the projected external financing.

Tax revenue is projected to increase from Shs18.82T in FY2019/20 to Shs20.04T in FY2020/2021 indicating an increment of 6%.

Government also highlighted a number of interventions for the 2020/2021 national budget among which include; Increasing production and productivity in the productive sectors of the economy, enhancing private sector competitiveness, Consolidation and increasing of the infrastructure stock, and regional/rural economic development, Improving social service provision and regional equity, Improving the effectiveness of governance and, Maintaining peace and security.

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