Uganda Revenue Authority registered a surplus in tax collections for July 2020 resulting from an increase in production from companies.
URA collected Shs 1.2 trillion in July 2020 against a target of Shs 1.02 trillion – registering a surplus of Shs 179 billion for the month, according to the July performance of the economy report by the Ministry of Finance.
The surplus in July is a promising start for the government for the 2020/21 financial year, especially when the government struggled to collect money in the second half of the 2019/20 financial year.
In June this year, Minister of Finance, Matia Kasaijja decried under-declaration from dishonest manufacturers, saying it was affecting revenue collections.
Kasaijja said using the recently introduced Digital Tax System (DTS), the government has got evidence of tax evasion and under declaration of production from manufacturers.
“I do not want to embarrass the business people, but hitherto they were saying we are producing 1million bottles of something for example, but when we put that DTS system now the production has gone to 3million, so where are the 2 million coming from? And of course, they have been paying tax for only the 1 million, the other 2million gets hidden,” Kasaija said.
Since the introduction of DTS, one of its goals was to seal revenue leakages and boost collection and increased efficiency in managing taxpayer compliance.
Uganda Revenue Authority recently said at least 84 companies that have not been paying tax had joined the DTS to become tax compliant.
URA also noted that they have been able to deal with the challenge of under-declaration by manufacturers through the DTS.
“For example, a taxpayer instead of declaring 500ml would declare 300ml. This translated into monthly under declaration. With DTS implementation, URA has been able to know the right volumes coming off production lines,” URA said in the report highlighting the performance of the DTS.
The digital tracking solution is provided by Swiss company SICPA.