[UAH] Budget funding gap could hurt taxpayers!!!
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Budget funding gap could hurt taxpayers
Posted Tuesday, June 11 2013 at 01:00
IN SUMMARY
Feeling the burden. Ugandans will likely feel the burden of increased taxes in the 2013/14 financial year as the government seeks to create more funding options to the void left by donor aid cuts.
The government will tighten its tax mobilisation noose in the coming financial year as it seeks to widen taxable avenues from both within and beyond Uganda. The budget reading scheduled this Thursday, comes amid suspension of donor funding which has created a serious funding gap.
Finance minister, Ms Maria Kiwanuka is expected to announce a rise in the national resource envelope for the 2013/14 financial year, from Shs11 trillion in the current financial year to over Shs12 trillion.
According to the 2013/14 National Budget Framework Paper, Shs8.84 trillion is expected to be mobilised domestically,Shs49.6 billion from budget support, project support (Shs2.33 trillion) and Shs779.8 billion from the domestic banking system.
Dr Patrick Wakida, the chief executive officer, Research World International told Prosper last week that Ugandans should brace for tax increases to enable government meet the budget increase.
He, however, added that government's bold step to increase the budget after development partners suspended funding over massive theft in the Office of the Prime Minister could be in anticipation of oil revenues.
According to the Budget Framework Paper, the Works and Transport and the Energy sectors are expected to take the lion's share, with a 15.1 per cent allocation of the resource envelop for each of the three sectors.
The allocation to the Transport sector is expected to increase to Shs1.76 trillion from Shs1.65 trillion in the current financial year.
Agriculture
Meanwhile, although agriculture is one of the primary growth sectors of the Ugandan economy, contributing about 19.7 per cent of the GDP, allocation to the sector is not expected to increase much from the current financial year.
According to the Budget Framework Paper, allocation to the sector is only expected to increase marginally to Shs384.2 billion from Shs378.9 billion (3.3 per cent). Experts, however, said a 1.3 per cent increase is too small to address productivity challenges constraining a sector which employs over 66 per cent of the population.
"We need to see a 1000 per cent funding in the agricultural sector to be able to post good productivity and attract investments," Dr. Geoffrey Bakunda a professor at Makerere University Business School observed.
Government plans to put emphasis on 10 key commodities that are strategic for food security and income generation including maize, beans, rice, banana, cassava, beef cattle, dairy cattle, fish, tea and coffee in the coming financial year.
With a rise in the resource envelope and an increase in the URA's revenue collection target from the current Shs7 trillion to Shs8.84 trillion in the coming financial year, the revenue body will have to widen its tax base to meet the target and a new set of taxes is also expected to be introduced in the coming budget.
Energy
The Energy sector budget allocation on the other hand is expected to increase to Shs1.76 trillion from Shs1.48 trillion in the current financial year. Like was the case in the 2012/13 financial year, the expenditure allocations for the sector will include the Karuma Hydro Power Project, which will under the Large Hydro Power Infrastructure fund continue to receive an allocation of Shs1.09 trillion while Shs35 billion is earmarked for the acquisition of land for construction of the oil refinery.
Shs8.04 billion is expected to be allocated to the mineral sub-sector in the 2013/14 to aid in the commencement of ground geophysical mapping of Karamoja and procurement of equipment for geothermal exploration.
Health
The total budget allocation for the health sector in the coming financial year is projected at Shs930.52 billion, up from Shs852.2 billion. This accounts for 8 per cent of the total budget for the coming financial year.
Primary Health Care at the decetralised level will take the biggest share of the health budget (Shs291.23 billion) pharmaceutical and medical supplies under National Medical Stores (Shs210.29 billion) and regional referral services (Shs56.98 billion).
The government further plans to construct Isolation Units at Mulago National Referral Hospital under the Public Health laboratory strengthening project, a specialised maternal and neonatal health care unit at Mulago Hospital, procurement of consumables for the Catheterization, Maintenance of cath lab and Open Heart surgery equipment, training and research, at the Uganda Heart Institute and procurement of specialised cancer medicines
Education
Although its budget allocation is expected to be trimmed by 2.4 per cent in the coming year, the Education sector is expected to have the third largest share of the total resource envelop – 13.3 per cent, according to the Budget Framework.
The sector's budget allocation is projected to reduce to Shs1.55 trillion in the coming financial year, from Shs1.59 trillion allocated in the 2012/13 financial year. This comes at a time when teachers are demanding for a pay rise due to the increasing cost of living. Mr Gilbert Olanya, Member of Parliament Kilak County, Amuru District said the education sector needs more funds and that it would have been given first priority.
"This is a disappointment and unfair that government is slashing the education budget when it would be increased. This is going to force more teachers into Boda boda riding and abandon teaching," Mr Olanya, who also sits on the Parliament Social Services Committee, said.
Tourism
In a move likely to dampen the mood among players in the tourism sector who have over the years asked for more funds to enable them market Uganda as a tourist destination- government has instead trimmed the sector's allocation in the 2013/14 financial year.
The total allocation for the Ministry of Tourism, Wildlife and Antiquities in the 2013/14 budget is projected to reduce from Shs10.9 billion in the current financial year to Shs10.761 billion.
The total allocation for the Uganda Tourism Board – a body charged with marketing Uganda as a preferred tourism destination – is also expected to decrease to Shs1.4 billion from Shs1.8 billion in the current financial year.
Although tourism is among the sectors with huge untapped potential, players in the industry say not much can be achieved with such meager funding. According to Vision 2040 which was launched by President Museveni in April, Uganda has potential to reap over $12 billion annually from the tourism sector if promoted well to become one of the leading top 10 tourism destinations in the world.
To supplement the limited resources from government, plans are underway to establish a Tourism Development Fund and the implementation of a tourism development levy in the coming financial year.
The levy is expected to generate at least $9 million (about Shs22 billion) annually, according to the Tourism Minister Ms Maria Mutagamba.
- STILL SURVIVING THE MAFIAS,LIVING IN FEAR AND PAIN,BEING HUNTED LEFT,RIGHT AND CENTER BY MAFIAS PLUS THEIR NETWORKS.
- ON 29/JANUARY/2004 DURING RADIO ONE EKIMEEZA TALKSHOW AT CLUB OBBLIGATTO I REVEALED THE PRESENCE OF MUSEVENI CHEMICAL AND BIOLOGICAL WEAPONS OF MASS DESTRUCTION BOUGHT FROM NORTH KOREA AND IRAN-THAT WAS HIDDEN UNDER GULU AIRPORT HUNKER AND THE UNITED NATIONS GRABBED,DESTROYED AND TOOK AWAY THE REMAINING ONES TO UNKNOWN DESTINATION-THIS IS ONE REASON WHY PRESIDENT MUSEVENI AND HIS MAFIAS CAN NEVER-NEVER-I SAY NEVER FORGIVE ME SINCE I EXPOSED AND SPOILED THEIR DEADLY DESTRUCTIVE AGENDA FOR NORTHERN UGANDA!!!
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