Oil and gas sector activities boost tax revenue in August 2023

KAMAPALA, September 22, 2023 – Tax revenue collections in August amounted to about Shs 1,990.91 billion, which was Shs 6.98 billion above the target, according to the Performance of the Economy Report August 2023.

According to the report published by the Ministry of Finance, Planning and Economic Development [MoFPED], direct domestic taxes especially Pay As You Earn [PAYE] and the tax on returns on treasury bills and bonds performed well. “PAYE continues to perform well due to increased activities in the oil and gas sector leading to the creation of more jobs,” the report says.

Overall, the report says, the surplus registered under direct domestic taxes was Shs 88.60bln which more than offset the shortfalls registered under indirect domestic taxes and taxes on international trade transactions.

On the other hand, the report says, indirect domestic tax collection underperformed at Shs 537.43bln against a target of Shs 578.73bln, resulting in a shortfall of Shs 41.31bln. “Both excise duty and Value Added Tax [VAT] were short of their targets as the level of aggregate demand that was anticipated for the month did not materialise,” says the report.

Taxes on international trade transactions were lower than projected for the month by Shs 40.89bln. “This was partly due to lower than anticipated imports for the month, resulting in shortfalls in excise duty and VAT on imports.”

Expenditure

Total government spending in August 2023 amounted to Shs 2,456.63bln, the report says. “This was against a program for the month of Shs 2,593.32bln, representing a 94.7 percent performance. Expenditure on both the recurrent items and capital items was lower than planned.”

Recurrent expenditure was lower than the programmed figure by Shs 44.18bln, mainly on account of non-wage recurrent items of which spending was less than planned by Shs 41.75bln. “This is partly explained by some MDAs [Ministries, Departments and Agencies] that spent significantly more in July 2023, thereby reducing the need to spend available during the month under review.

Similarly, expenditure on development projects was less than programmed for the month, amounting to Shs 616.67bln against the target of Shs 704.99bln. “Both domestically and externally financed project spending were below target,” the report says.

The report says domestically financed development spending performed at 90.8 percent, being lower than anticipated by Shs 17.51bln. On the other hand, external development expenditure fell short by Shs 70.81bln representing a performance of 86.3 percent.

https://thecooperator.news/b50-youth-get-ready-for-opportunities-in-oil-and-gas-sector/

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