News and Analysis

Uganda Revenue Authority experiences more revenue losses

The Uganda Revenue Authority boss, Allen Kagina told Parliament’s finance committee on Tuesday 22nd April, 2014 that URA has incurred a revenue shortfall of Ugx 270 billions during period from November 2013 to April 2014.

When asked to explain, Allen attributed the shortfall to commercial banks that provided bad debts and this affected the revenue collections by URA. She also cited the sale of Warid to Airtel Uganda having reduced taxes from the telecommunication industry. This implies that after the acquisition, the total revenue by the swap reduced, and there was no synergy.

Companies that were previously making profits declared smaller profits or losses indicating a decline in the economy. The high levels of tax evasions/illegal means of paying tax have also greatly affected the tax revenue collections. People continue to explore tax avoidance structure so as to pay less tax.

Uganda is facing challenges with the funding of most of the activities after European countries cut off aid to Uganda. This came after president Museveni signed the Anti-gay bill into law of which most European countries criticized. This meant that Uganda had to rely on the taxes for its survival. Allen Kagina said such a fall in revenue will affect allocations to various ministries in the last quarter 2013/2014 financial year.

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