Uganda Increased Tax Revenue Target by 0.5% to Close Budget Gap
Uganda raised its tax collection target for the 2012-13 financial year by about 0.5 percent because the initial amount was insufficient to finance budget spending, the Uganda Revenue Authority said.
The target for the 12 months through June was raised by 34 billion shillings ($12.8 million) from 7.2 trillion shillings, Sarah Birungi Banage, the assistant commissioner for public and corporate affairs at the authority, said today by phone from Kampala, the capital.
The government made the change in October after parliament endorsed the budget, Banage said. Net collection in November was 557.5 billion shillings, below the target of 568.7 billion shillings because the “aim was high,” she said.
The upward revision came shortly before donors including the U.K., Ireland, Denmark, Sweden and Norway cut aid in November after their funding for rebuilding war-ravaged northern Uganda was embezzled. Such assistance accounts for at least a quarter of the country’s annual budget, according to the Finance Ministry.
Donors froze about $200 million in budget support this financial year, Keith Muhakanizi, the deputy secretary to the Treasury, said on Dec. 4.
Uganda’s central bank on Dec. 4 lowered its growth forecast for the East African nation to 4 percent to 4.5 percent in the wake of the aid cut and lack of private-industry growth. Growth of 3.2 percent in 2011-12 was the slowest in 25 years.
Uganda is set to become Africa’s newest oil producer when London-based Tullow Oil Plc (TLW) and its partners China National Offshore Oil Corp. and France’s Total SA (FP) begin pumping crude from the 3.5 billion-barrel discoveries.
To contact the reporter on this story: Fred Ojambo in Kampala at email@example.com