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She told reporters at URA’s headquarters in Nakawa recently that on each public holiday, Shs 30bn is lost in revenue. In the 2016 calendar year, there are seven public holidays falling into working days, this means the country will lose at least Shs 210bn in taxes.Follow @Newslex point
Does this mean that public holidays that are within the working days should be ignored for the country to gain .
Akol was speaking at the release of the authority’s performance in the 2015/16 financial year, where a Shs 400bn deficit was recorded.
“Despite the numerous economic challenges faced during the just-concluded financial year, including slower economic growth, reduced import volumes, depreciation of the shilling and a relatively-subdued investor confidence due to nervousness surrounding the political period, we tried our best,” Akol said.
URA collected Shs 11.2tn against the target of Shs 11.6tn. However, the body registered a 15.6 per cent growth in revenues if compared to the year before. Akol said a number of challenges strained their performance, including the election cycle. The country also expanded by 4.6 per cent, down from the projected five per cent.Follow @newslexpoint
URA also observed reduced profitability in the banking sector, which cost it at least Shs 12bn in corporate tax.
“A surge in non-performing loans experienced by the banking sector affected their profitability and hence revenue performance,” said Akol.
The year 2015 saw a surge in non-performing loans and assets growing by more than two-fold to more than five per cent. The assets were, however, affected mainly by a depreciating shilling and there were more defaulters among those who borrowed in dollars, according to Bank of Uganda.
Also, the private sector received less funding in terms of foreign direct investment as investors remained cautious over the election period. Foreign direct investment dropped by $300m from the $1.1bn in 2014/15 to $800m in 2015/16.
There was also a decline in general economic activity, leading to low demand which affected excise and VAT collections, with the country losing an estimated Shs 239.2bn in tax.
There are still indications that the economy is yet to rebound to the levels where growth averaged six per cent. The ministry of finance projects that the economy will grow at five per cent this financial year.
The media has been awash with the news of businesses seeking bailouts or risking buckling under the weight of debt. Francis Kamulegeya, a tax expert with PWC, said while this was a tough time, the economy’s future looks positive with a rebound likely to come sooner than anticipated.
“Inflation projections remain low; interest rates are coming down and business is starting to pick up,” he said.
URA has set a target of Shs 13.1tn for this financial year. Akol said this target will be achieved through specific taxpayer-engagement programmes.
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