Uganda Revenue Authority [URA] has reported under performance in Value Added Tax [VAT] which it attributed to a lower than expected outturn of UGX 92.02 billion on phone talk time, among others.
During a press briefing at Nakawa head offices Thursday, URA Commissioner General, Doris Akol, said the Value Added Tax (VAT) on phone talk time was affected by the changes in user tastes.
She cited a case where users prefer the use of data for communication through WhatsApp, Viber and Facebook as opposed to direct calls using airtime.
In addition, there was a price drop for both on-net and off-net calls from UGX 5 to UGX 3 per second (25 percent drop) due to competition which affected phone talk time collections.
This tax is Tax being advololrem in nature and when the base reduces, the tax automatically drops, she explained.
Levy on mobile money contributed a deficit of UGX 30.48 billion which can be explained by the fact that high value clients withdraw their funds from agency banking.
She said, for example, MTN has had a drop of 36 percent in mobile money transaction values since the introduction of the levy on mobile money.
In the first half of the year, the average growth of dutiable imports was at 1.30% while that of VATable goods was at -0.11% therefore affecting international trade tax collections.
The value of dutiable and VATable goods has consistently dropped and currently at 23% of the country’s total imports of these items and less than half pay import duty of 25% and above.
This is largely attributed to a lot of imports that fall in the exemption category.
Many previously imported items in various sectors are currently being manufactured in the country.
This has caused a shift in consumer behaviour with preference for locally manufactured goods at the expense of imported ones.
There has been an increase in the volume of goods from EAC and COMESA member states by 44.2% at a value of UGX 154 Billion.
URA debt recoveries amounted UGX 623.22 Billion representing 6.89% of the total revenue collected during the period July to December 2019 as a result of enforcement actions.
Customs enforcement interventions during the half year period of FY 2019/20, led to 3,890 seizures of which 2,860 were for dutiable goods and 1,030 non-dutiable goods yielding revenue worth UGX 36.31billion.
Recoveries made were a result of the following major offences; mis-declaration 36%, under valuation 32%, outright smuggling 8% and other offences (temporary road violations, transit violations) 21% and concealment 3%.