Under the umbrella of the Civil Society Budget Advocacy Group (CSBAG), civil society organizations have praised the government for its new significant budget initiatives, which they claim will hasten the economy’s recovery and enhance living conditions.
The executive director of CSBAG, Julius Mukunda, made the following remarks at a CSO Post Budget Dialogue on behalf of other CSOs: “Measures like not introducing new taxes in the 2022/23 financial year and providing a pro-people rental tax will help revive the economy by reducing pressures on the few already limited taxpayer.”
He added that the decision to stop paying value-added tax to government suppliers until they get payment will also help lower the tax burden on privately owned companies that supply the government and also control the growth of arrears by the government.
The Parish Development Model, which Mukunda said will assist alter the economy by focusing on the 39% of households currently engaged in subsistence economies, is one of the strategies he mentioned.
“Improving the compensation for our brave scientists, doctors, and scientific teachers will inspire the aforementioned cadres and enhance service delivery. Among other things, it will utilize a USD 217 million grant from the World Bank, according to him.
Mukunda pointed out that it is prudent for public finance management to play a key role in reviving the economy, encouraging private sector expansion, and providing services that are gender-responsive.
He pleaded on the government to address the issue of public debt, which he described as a ticking time bomb, as well as to make the budget more consumptive and more prepared to complete public projects.
The national public debt stock of Uganda was UGX 73.5 trillion at the end of December 2021, which corresponds to a nominal Debt to GDP ratio of 49.7%.
If this isn’t fixed, according to Mukunda, Uganda’s growth strategy could be derailed.
“Limited resources are available for service delivery due to the huge debt. We thus beg the government to give the implementation of the domestic revenue mobilization strategies top priority by investigating underutilized potential revenue streams like the digital economy and bolstering tax administration and procedures. Such measures will broaden the restricted tax base, he claimed.
“Government must reduce consumption-related spending and give development budget allocations first priority in order to provide services to the people. For instance, only UGX 14,565.9 billion (30%) of the FY2022/23 budget would be spent on development, and UGX 20,626.3 billion will be spent on ongoing expenses (UGX 14,259.4 billion for non-wage and UGX 6,366.9 billion for Salaries and Wages). This demonstrates unequivocally that, as a nation, we are not adjusting to the new normal of cutting back on consumption and maintaining denial, he continued.
He pleaded for spending on development to account for 70% of the budget.
Hannington Ashaba, the Commissioner of Public Investment at the Ministry of Finance, Planning, and Economic Development, stated that the government is committed to hastening the pace of the nation’s economic recovery to at least pre-pandemic levels by bringing more Ugandans into the money economy and boosting the country’s productive sector’s expansion.
He urged Ugandans to appropriately prepare themselves and seize the chances that the budget brings to both the public and private sectors.