By Sadique Bamwita
ENTEBBE
The advocates for Budget and Tax policy on April 4, 2024, discussed the potential risks and enablers in achieving the 2024/2025 Budget Aspirations.
The Advocates argue that government doesn’t have Shs58 trillion to spend in the proposed Budget for the next financial year and challenged government to look for other taxable avenues to achieve its budget aspirations.
The Executive Director Center for Budget and Tax policy, Mr. David Walakira, revealed that according to the second Budget call circular (BPD/86/107/10) issued on February 15, 2024, the financial year 2024/2025, the financial year Budget is projected to be Shs53,336.73 billion which is 599.94 billion (1.14%) increments from the financial year 2023/2024 approved Budget of Shs. 52,736.79 billion.
“Government doesn’t have the money and the available money has to be adjusted for interest rate payment. To realize its budget aspirations management of inflation is critical, “said Walakira.
Mr. Walakira believes that the Budget Adjustment by government in the next financial year 2024/2025, has been occasioned by the withdraw of external funders and some exiting projects.
“We have discovered that 11 out of 20 programs got budget cuts because some external funders have pulled out.
Mr. Walakira advised government that if it’s to realize it’s budget aspirations, it should consider levying income tax on commercial cyclists (boda riders) as many of them earn good money compared to their counterparts doing office jobs. He however, cautioned politicians against politicizing it for cheap popularity.
“Increase in taxes implies rendering top quality services to the general public. We know very well government is good at collecting taxes but very poor when it comes to service delivery for instance the Kampala roads which are full of pot holes yet a lot of revenue is collected from the city. Therefore, the level of hypocrisy which takes a center stage when collecting taxes should stop, “Mr. Walakira sounded his warning.
Mr. Walakira said for the 2024/2025 Proposed Budget to be meaningful, government must reduce its domestic borrowing, though it intends to borrow Shs2.795 trillion up from Shs1.885 trillion in the financial year 2023/2024.
“The government Budget aspirations for the financial year 2024/2025 can only be tenable if there is full participation of tax payers. If all of us pay our taxes promptly we shall be on a better trajectory to achieving vision 2040 and National Development Plan III.
“I know what is holding resources for parliament are extension of the sitting parliamentary chambers currently under construction. We have discovered that as the chambers near completion, the funding for the building facility begins to get redundant hence potentially this is an area that can be touched to adjust the budget for the parliament,” he says.
The Acting Manager Governance and Accountability at Oxfam Uganda, Sophie Nampewo Njuba, urged government to be fair when taxing people in private sector saying heavy taxation limits them from accessing credit from financial institutions.
“Tax proposals are out and it’s crucial to look at them and the element of private sector credit is an issue. Due to exorbitant taxes levied on the cost of doing business, many in the private sector can’t access credit because the taxman is unfair to them. Increasing fuel prices may be a challenge in increasing the cost of business. Therefore, before approving the budget for the coming financial year 2024/2025, legislators should ensure the tax proposals coming out don’t affect citizens and the cost of doing business,“ Mrs. Nampewo made her appeal.
She further criticized government for allocating much money to central government and allocating less to Local governments yet local governments are at the forefront in delivering services to locals.
“Allocation to Local governments is low which adversely affect service delivery. We call upon government to reconsider this such that local governments are given enough allocations,” she said.
