The government will in the next Financial Year 2022/23 enhance its fiscal discipline by managing its expenditure, the Permanent Secretary Ministry of Finance and Secretary to the Treasury, Ramathan Ggoobi, has said.
Ggoobi says the government has made changes in the budgeting principles by discarding the incremental principle which has been locking money in areas that are no longer priorities, requiring mobilisation of additional resources for any new priorities.
He added that resource allocation will be based on the redistributive principle where resources are reallocated from areas that have ceased to be a priority to finance new critical priorities.
Ggoobi noted that for the first time Uganda will collect UGX25 trillion locally (yet there are no new taxes introduced) as well as increase the existing ones to give the economy room to reduce borrowing.
“We are avoiding borrowing for consumption. Uganda will never do that. We will borrow for productive projects which we are also sequencing now and we are going to cancel those which are not likely to deploy the money on time to avoid huge debt repayments,” PSST Ramathan Ggoobi.
Uganda currently has a debt to GDP ratio of 53.12% with a public debt of more than 73 trillion shillings.
According to Ggoobi, the government will work to limit its borrowing in order to restore the debt to GDP ratio to 50%.
He made the remarks during Uganda Revenue Authority (URA) Post-Budget Conference 2022 held at Hotel Africana.
Last week, the Minister of Finance, Planning and Economic Development, Matia Kasaija, unveiled the new financial year’s Shs48trillion budget.
Out of the Shs48trillion budget, UGX 25,550.8B (Shs25.5 trillion) which is about 53% of the budget, is to be financed from tax and non-tax revenue sourced internally and the rest from aid and grants.
The Commissioner-General of URA, John Musinguzi, said research has shown that for any country to develop, it must collect at the very least 20% of its GDP, and, at URA, they are convinced that it is possible if every tax-eligible citizen plays their civic duty.
He noted that the current tax register has about 2.4 million taxpayers and out of a population of 45 million Ugandans, there are over 7 million people engaged in income-generating activities but many are not contributing to the tax basket.
He said in order to realize the new revenue target, a collective effort and commitment across government, civil society, private sector, and development partners is paramount.
“At URA, we have instituted mechanisms to improve our efficiency in service delivery to enhance taxpayer compliance towards realizing the target. These initiatives are all in line with the government’s Domestic Revenue Mobilization strategy as highlighted below,” Rujoki said.
With only 10 days left to end the current financial year, Musinguzi asked all eligible taxpayers to honor their tax obligations.
URA has so far collected Shs20.5 trillion and Musinguzi is optimistic that by June 30, they will have collected the remaining Shs2 trillion to end the year successfully.
