Africa-Press – Uganda. The fiscal operations in June 2021 by the Uganda government resulted into an overall deficit of Shs 1.257 trillion which was higher than the planned deficit of Shs164.28 billion for the month.
The above development implies that during the last month of the financial year 2020/21, government spending was very high due to supplementary expenditure undertaken to withstand the impact of the Covid-19 pandemic in people’s lives and health system.
The Ministry of Finance, Planning and Economic Development says in the monthly performance of economy report for the month of June 2021, this was on account of revenue shortfalls and the higher than planned spending during the month.
During the month under review, domestic revenues Government collected was worth Shs2.161 trillion in June 2021, representing a shortfall of Shs336.70 billion or 13.5 percent against the target.
Of this, Shs2.101 trillion was tax while Shs59.93 billion was non-tax revenue.
“All major tax heads registered shortfalls against their respective targets, as collections were affected by the implementation of restriction measures to curb the resurgence of Covid-19 during the month,” the report reads.
According to Finance Ministry, direct domestic taxes amounted to Shs1.122 trillion, representing an 87.0 percent performance rate against the target for the month.
“This performance was partly on account of the underperformance of corporate tax collections as firms encountered low profitability amidst challenges posed by the second lock down. Indirect taxes registered a 92.9 percent performance rate, as both excise duty and VAT registered shortfalls for the month,” said the Ministry of Finance.
It explains that the underperformance by indirect taxes is partly attributed to a slow-down in demand for taxable products. Taxes on international trade amounted to Shs645.00 billion, representing a performance rate of 91.2 percent against the monthly target.
This was mainly on account of shortfalls in import duty, withholding taxes and infrastructure levy as result of lower import demand during the month, which was partly linked to the on-going lockdown.
Expenditures Preliminary numbers indicate that Government expenditure in June 2021 amounted to Shs3.434 trillion which was 24.2 percent above the planned spending levels.
The report further indicates that expenditure on both recurrent and development activities exceeded their monthly targets.
The Ministry officials further said that higher than planned spending on recurrent items during the month was largely explained by transfers to Uganda National Oil Company (UNOC) worth Shs480.9 billion.
Adding that Payment of wages and salaries was Shs5.1 billion or 1.2 percent above planned levels, while interest spending performed as planned.
At the same time, development expenditure amounted to Shs1.265 trillion, reflecting a performance rate of 103 percent against the target. This performance is attributed to higher spending on domestically financed activities which more than offset the underperformance on externally financed activities.
The Ministry of Finance, Planning and Economic Development did stressed the higher spending on domestically funded activities was attributed to payments worth Shs192.0 billion made under Uganda National Roads Authority (UNRA) and Shs115.6 billion under Ministry of Works and Transport (MoWT) for the construction of roads and bridges.
Externally financed development projects underperformed with expenditure totaling to Shs292.4 billion, representing just 51.6 percent of the target for the month following some expenditure front-loading in the previous month.
