It is not news that Uganda ranks highly on the list of countries that drink the most alcohol in the world, and it is because of this the revenue collection body Uganda Revenue Authority (URA) decided to levy a somewhat high tax on all alcoholic beverages.
Ugandans didn’t back down on their consumption of the contents of the bottle and URA registered good returns until government decided to ban Waragi in sachets citing health concerns.
The government ban has greatly affected the revenue collected from the spirits/waragi sector, leading to a deficit of over Shs17.7 billion in the first quarter of 2019/2020 financial year.
The spirits/Waragi sector is not the only sector that has registered deficits. Altogether, URA has registered a deficit of over Shs502 billion in the first quarter of this financial year, with tax targets for PAYE, VAT, Excise and Import Duty, Corporate tax, Petroleum Duty among others all not met.
The fall on sugar prices, the limited use of phone talk time due to the increased use of social media for communication, and delays in awarding tax a contract to RippleNami Inc to help URA collect Rental inmcome tax have been cited as some of the reasons for this shortfall.