MPs grill public service boss over tax

Basing on the Auditor General’s report for 2021-2022, the committee found that in 43 local governments, political leaders and district service commissioners were paid gratuity of over sh1.3b which was not subjected to PAYE computations and deductions leading to a loss of tax revenue of over sh363m to Government.

In response, Bitarakwate explained that the Integrated Personnel and Payroll system had initially been configured on provisions of the Pensions Act on the understanding that gratuity which is a terminal benefit is not taxed although it was later clarified.

However, the committee chairperson who also doubles as Bardege–Layibi MP Martin Ojara Mapenduzi was not satisfied with her explanation, saying the ministry was not doing enough to address the loopholes.

During the first half of the 2022/23 financial year, the Uganda Revenue Authority (URA) registered a Gross Domestic Revenue of sh7.47b against the targeted sh7.450b resulting into a surplus of sh19.32b.

The URA’s commissioner-general, John Musinguzi, attributed the improvement of Gross Domestic Revenues to the improved PAYE tax collection which he said could have come as a result of bonuses given by employers towards the end of the year (2022), and more compliance from the employers.

"Major surpluses were registered in PAYE (sh225.85b), casino tax (sh29.33b), rental tax (UGX 17.06 billion) and tax on bank interest (sh8.80b)."

The Customs Revenue collections stood at sh4.453b against a target of sh4.563b representing a 97.59% of the targeted revenue.