According to Ramathan Ggoobi, the Permanent Secretary of the Ministry of Finance and Secretary to the Treasury, the government will improve its fiscal discipline in the upcoming fiscal year 2022–2023 by controlling its spending.
According to Ggoobi, the government has changed the fundamentals of budgeting by abandoning the incremental principle, which had been tying up funds in areas that were no longer priorities and necessitated the mobilization of additional funds for any new priorities.
In order to support new crucial priorities, resources will be moved from areas that no longer have priority, according to the redistributive principle, he continued.
Ggoobi pointed out that Uganda will be collecting UGX25 trillion locally for the first time, but no new taxes are being imposed or existing taxes being raised. This will allow the economy flexibility to cut borrowing.
According to PSST Ramathan Ggoobi, “Uganda will never borrow for consumption; instead, we will borrow for productive projects that we are currently sequencing and will cancel those that are unlikely to use the funds on schedule in order to avoid significant debt repayments.”
With a governmental debt of more than 73 trillion shillings, Uganda now has a debt to GDP ratio of 53.12%.
However, he stated that in order to get the debt to GDP ratio back to within 50%, the government will endeavor to limit its borrowing.
He said this at the Hotel Africana’s Post Budget Conference for the Uganda Revenue Authority in 2022.
The Shs48 trillion budget for the upcoming fiscal year was revealed last week by Matia Kasaija, Minister of Finance, Planning, and Economic Development.
Out of the Shs48 trillion budget, UGX 25,550.8B (Shs25.5 Trillion), or roughly 53% of the budget, is to be funded by internal tax and non-tax revenue, with the remaining funds coming from aid and grants.
According to URA’s commissioner general, John Musinguzi, every nation must collect at least 20 percent of its GDP in taxes if it is to develop. URA is persuaded that this is feasible provided every tax-eligible individual fulfills their civic responsibility.
Out of a total population of 45 million Ugandans, he pointed out that there are currently 2.4 million taxpayers on the tax rolls and that over 7 million people are involved in income-generating activities, albeit many of them do not pay taxes.
A coordinated effort and commitment from the government, civic society, corporate sector, and development partners, according to him, are essential to achieving the new revenue objective.
“At URA, we have put in place methods to increase our service delivery efficiency to improve taxpayer compliance and reach the goal. All of these activities are in keeping with the government’s plan to raise domestic revenue, which is noted below, according to Rujoki.
Musinguzi requested that all qualified tax payers meet their tax commitments as there are just 10 days remaining in the current fiscal year.
URA had a total of Shs22.4 trillion and had already collected 20.5 trillion; Musinguzi was certain that they would collect the final 2 trillion by June 30, 2022, allowing them to successfully complete the year.