By George Bukenya
Despite an enhancement in the planned revenue collection in the 2024/ 2025 financial, government failed to collect taxes totalling to over one trillion in the financial year ending 2023/2024.
Experts attribute this to a narrow tax base and poor performance of the economy which has forced many businesses to wind up their operations in the country for the last three years for instance most Super Markets like Nakumati closed.
The lion’s share of the coming budget as usual was taken by governance and security sector (Shs9.2 trillion) and this time round the Human Capital Development for the first time have been invested in heavily (Shs9.9 trillion) while funds put in Agro-Industrialization is only Shs1.7 trillion.
Transport Infrastructure received Shs5.2 trillion, Sustainable Energy Development shs1.1 trillion, government has also enhance private Sector Development funding as a way of attracting more investments to occur and this will get Shs2.1 trillion, while Development Plan Implementation and Regional Development will each get 2.3 and 1.6 trillion respectively.
Dr. Fred Muhumuza an economist and a lecturer at Makerere University Business School argued that the focus should in this financial year’s budget should be put on who benefits more from it.
He made a concern the rigidity of the budget, arguing that a siginifanct portion is already earmarked to be committed on debt servicing and statutory expenditures leaving little space for development expenditures and expansion of investments. He also cited a challenge of government being unable to prioritise its needs within the budget where he gave an example on one having money in bank and you decide to move with very little money and for go all your needs.
The academician also said that in this year’s budget there’s no winner or loser and the only winners are those lending money to the state and they are picking interest and they will be paid to a tune of Shs.8.8 trillion.
Theodora Ssekikubo the Rwemiyaga county legislator who talked the writer of this website said that it’s wasn’t necessary for government to enhance this financial year’s budget to a tune of slightly over Sh72 trillion because this is being unrealistic.
The outspoken legislator reasoned that if in the financial ending government failed to collect over one trillion in form of taxes and non tax sources how sure is it true that all what is budgeted will be realized.
He said that there’s still a huge challenge of the large substance sector which limits very much the tax base and this is coupled with very low income experienced by the majority of the citizens which implies that enhancement of the budget figures was uncalled for.
While reading the budget yesterday the Minister of Finance Matia Kasaijja revealed that the economy is projected to grow by 6% in the FY 2024/2025 while GDP will expand to Shs 225.5 trillion
According to the minister, this growth will be driven by among other factors; increased oil and gas activities, growth in exports supported by the increase in regional trade, intra-Africa trade and harnessing existing and new partners in the Middle East and Asia.
As a measure to ensure that the planned revenue collection, government has introduced new taxes and also enhance taxes on some commodities after the proposed tax reforms are effected.