Uganda’s trade deficit narrows further in March as exports revenue drop 11.4 percent
May 18, 2020
Loans hit Shs15.9 trn in April as new report shows mixed results in Uganda’s financial sector
May 19, 2020
By George Mangula
Government operations during the month April 2020 attracted an overall fiscal deficit of about Shs 1 trillion which was higher than the planned deficit of Shs 712.04 billion, according to the latest Performance of the Economy Report released by the Ministry of Finance.
According to the report issued on Monday, the higher deficit was due to the shortfalls in the expected revenues and grants. Expenditure and net lending performed below programmed in the month at 81.2 percent.
Revenue and grants miss monthly targets
The report shows revenue and grants amounted to Shs 965.87 billion in April 2020 which was below the monthly target of Shs 1,755.65 billion. Both domestic revenues and grants were below their monthly targets, performing at 59.1 percent and 16.6 percent respectively.
Domestic revenue collections fall
The report further says domestic revenue collections amounted to Shs 937.64 billion in the month, registering a shortfall of Shs 648.18 billion as both tax and non-tax revenue performed below their respective targets. “Of the total revenue collected, Shs 931.42 billion was tax revenue while Shs 6.22 billion was non tax revenue. Tax revenue collections registered a shortfall of Shs 547.12 billion against a target of Shs 1,478.54 billion, with shortfalls recorded for all the broad tax12 categories.”
Taxes on international trade perform badly
Taxes on international trade transactions performed at only 49.4 percent, registering the biggest shortfall of Shs 313.92 billion, due to a reduction in dutiable imports during the month arising from the effects of COVID-19 on trade.
“Indirect domestic taxes performed at 66.2 percent of the target for the month, registering a shortfall of Shs 154.22 billion as collections from Value Added Tax (VAT) and excise duty on goods such as beer, spirits and sugar among others were lower than anticipated.”
On the other hand, direct domestic tax collections were lower than the target by Shs 71.87 billion as Pay As You Earn (PAYE), corporate tax, withholding tax, presumptive tax and rental incomes tax were lower than programmed. The report partly attributes the fall to the effect of COVID-19 on the economy that resulted into temporary laying-off of some workers and/or salary cuts, reduced profitability of firms and reduced payment of rents by tenants.
Non-Tax Revenue (NTR) collections in the month were Shs 6.22 billion against a target of Shs 107.27 billion, registering a performance of 5.8 percent. This was mainly due to the temporary closure of most MDAs that offer services on which NTR is charged.
