Aid cut affects collection of revenue in Uganda

23rd, January 2013

The Uganda revenue  authority has failed to reach its target in the half of  the financial year 2012/ 2013 of  3,551 billion Uganda shillings, this has been attributed to the economy´┐Żs failure to grow more  than the  expected a rate of 7 percent and the aid cut from the European Union.

The economy was expected to grow at a rate of 7 percent in the financial year 2012/ 2013 but the effects of the economic wave within the economy derailed the development. The rampant corruption that led to the donor aid cut, slowed down the economy to as low as   5 percent.

The above trend impacted the tax collection from different sectors of the economy. Uganda revenue authority had a target of 3,551 billion shillings but in the  first half of this financial year, a deficit of 175 billion Uganda shillings has been registered

However,though the collectors registered a deficit in the overall performance in the half of the financial year but domestic taxes have registered a surplus of 19 billion shillings.

This is attributed to the government efforts to commission Bujagaali hydro power dam and this led to the surplus of 50 billion shillings of vat from electricity subsector 

On the regional, level Rwanda performed better than Uganda Kenya, Tanzania with 109 percent. 97.40 percent, 88 percent and 95 percent respectively 

The outlook for January is 591 billion shillings; the authority is hoping to bridge the revue gap by formalizing export and transit goods to south Sudan to curb smuggling across the Uganda south Sudan boarder