This happened as a result of the public sector recruiting and promoting employees. Apparently, the authority also registered an increase in PAYE collections by sh61.91 billion. This increase was attributed to the payment of bonuses and higher salaries in the private sector.
The information contained in the Ministry of Finance report on the Budget further shows that during the same period, the Authority also registered a surplus of sh17.83 billion from gaming tax.
It has not been all positive for URA however. The body registered a deficit on corporate income tax (sh214.44 billion), withholding tax (sh126.74 billion), and rental income tax (sh122.1billion).
They attributed the deficit on corporate income tax to the profitability decrease of firms. This resulted from the negative impacts of the lockdown during the pandemic.
In addition to that, the implementation of rental income tax caused a deficit in the rental income tax.
“This delay alone accounts for sh85 billion of the above shortfall. In addition, there have been some losses on account of ambiguity in the rental income tax legislation, which complicates tax administration,” the Authority said.
The authority revealed the shift in behavior of some individuals as some businesses operated in remote areas permanently while others shifted online. This resulted in declines in occupancy and hence, the decline in rental income tax.
The withholding tax deficit came as a result of the decline in government payments. Government payments declined due to remote operations, general budget cuts, Management & Professional fees, and General supplies.
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