BY SALIM KALANZI
In the next fiscal year, the government hopes to collect at least sh22.63 trillion as domestic revenue, representing a 1.6% increase compared to the current financial year 2020/2021 to finance the sh44.7 trillion budget.
Of the sh22.63 trillion, it projects that sh20.83 trillion will de derived from tax revenue and sh860 billion will come from nontax revenues. About sh940.4 billion will come from aid.
The government will borrow sh11.48 trillion domestically from financial institutions and investors through government treasury bills and bonds. Meanwhile, it will borrow sh9 trillion externally, some sh1.4 trillion is expected from grants among others.
“It should be observed that sh200 billion will be drawn from the Petroleum Fund to specifically finance oil road infrastructure during financial year 2021/2022. Domestic and External Financing will constitute 76.7% and 23.3% of the total resource envelope, respectively,” Parliament’s Budget Committee Chairperson Amos Lugoloobi says.
The budget allocations for the financial year 2021/2022 have been structured along the programme approach premised on the 18 development programmes highlighted in the third National Development Plan (NDP III).
The government has maintained the theme for the budget is Industrialization for Inclusive Growth, Employment and Wealth Creation.
It is centered on policy interventions required to sustain recovery from the socio-economic setbacks caused by Covid-19 pandemic as well as harness the opportunities that come along, and the Third National Development Plan Strategic objectives.
Out of the sh44.7 trillion budget, sh12.66 trillion is Recurrent and Development expenditure is sh14.59 trillion while sh17.15 trillion is statutory expenditure charged directly on the Consolidated Fund.
Lugoloobi reveals that the largest share of resources is towards debt-related payments (inclusive of domestic arrears) at 15.1 1 trillion (38 percent). This is followed by Governance and Security at 6.7 trillion (15.57 per cent), Human Capital Development 7.59 trillion (16.97 per cent), and Integrated Transport Infrastructure and Services at 5.02 trillion (11.2 per cent).
The other programme allocations are Agro- Industrialization 1.68 trillion, Regional Development 1.24 trillion and others.
Some of the least funded programmes are Tourism development 178.9 billion, Sustainable Development of Petroleum Resources 106.4 billion, Community Mobilisation and Mindset Change 56.9 billion, Manufacturing 54.4 billion, Mineral Development 49 billion and others.
The Taxes you face starting July
Some of the taxes approved by parliament for the next financial year from which government will finance the budget are excise duty of 12% of fees for internet data excepting data for provision of medical and education services, 100 Shillings tax increase on each litre of petrol and diesel expected to fetch 196 billion, 8% levy on fish maw exports and others.
The others are a 5% levy and 10% levy on processed gold and unprocessed minerals respectively, 25 tax on income for owners of rental premises, $0.8 levy per kilogram of leaf tobacco exported 30% rental tax on commercial buildings, 5% excise duty on plastic packaging and others.
Muwanga Kivumbi, the Butambala County MP in a minority report jointly authored by Dokolo Woman MP Cecilia Ogwal queried the increasing allocation to debt management.
In the current financial year, sh12.69 trillion was approved towards debt management and this has increased to sh15.1 trillion, a difference of sh2.41 trillion.
David Bahati, the Minister of State for Planning said that public debt is projected to rise to 51.9 percent of Gross Domestic Product (GDP) in financial year 2021/2022 on account of borrowing to finance key infrastructure projects, especially in the transport and oil and gas sectors.
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He said that the projected debt of 51.9% of GDP next year will go down in the financial year 2022/2023.
He also said that despite the negative effects of Covid-19, the economy has been resilient and is projected to grow at 4.3% in financial year 2021/2022.
Additional reporting by URN