Africa-Press – Uganda. Pay As You Earn (PAYE) employees continued to post mixed results in March, signaling a difficult recovery in the employment sector since the beginning of the year.
The employment sector is still dampened by Covid-19 with a number of companies cutting jobs while others have maintained varying salary deductions.
This is in addition to a reduction in demand for a number of goods and services, which has had an adverse impact on self-employment and the informal sector.
The employment had shown recovery since September last year but has stagnated and continues to be below the pre-Covid-19 period.
Before Covid-19, PAYE employees had been recorded at an average of at 729,531 employees per annum.
However, the number, according to the Emerging Microeconomic Trends and Patterns for Policy Attention in the 2020/21 (financial year) and the Medium report by the Ministry of Finance, has since stagnated dropping to 655,482 employees in March from 670,434 in February.
In January, the number of PAYE contributors had recovered to 649,635 befor growing further in February to 670,434.
In a January report, the Ministry of Finance indicated direct domestic tax collections had been greatly affected due to shortfalls resulting from PAYE and Withholding Taxes, two of the largest categories in the tax sub-head.
The two sub-heads fell by 13.5 per cent and 27.5 per cent, respectively, forcing a dip in the performance of Income taxes.
The stagnation in PAYE contributors could be explained by a shift by a number of companies in regard to recruitment as many companies have adopted “a wait and see” approach due to existing uncertainties while others have frozen recruitment of new employees. Others have integrated online modules that continue to eliminate a number of jobs.
Recently, the Minister of Finance said Covid-19 is expected to at least drive 780,000 people into poverty.
