Taxation Matters: Calls for more Equitable Taxation, Fiscal Discipline and Sustainability amplified at the National Pre- Budget Dialogue
As part of the efforts of Civil Society Organizations to contribute to the National Budget process, SEATINI Uganda joined other CSOs, government Ministries Departments and Agencies and members of the media fraternity among other key stakeholders on 1st February 2024 for a Pre-Budget CSO Dialogue under the theme: “Repurposing the FY 2024/25 Budget: What are the key priorities for inclusive Economic Growth and Service Delivery”.
In his opening remarks Mr. Authur Bainomugisha, the Executive Director of ACODE, commended the Ugandan government and the Ministry of Finance for their efforts in maintaining macroeconomic stability. He specifically highlighted the achievement of a single-digit inflation rate from 9% in January 2023 to 2.6% in December 2023, underscoring its significancy in fostering stable economic environment. He notes still that this is critical in maintaining consumer confidence which is vital in fostering healthy and resilient economy.
Despite acknowledging the commendable 5.2% economic growth, Mr. Bainomugisha observed that while the economy is expanding, there seems to be a disconnect as people are not experiencing a corresponding increase in their financial well-being. This observation prompts a critical question: why is economic growth not translating into tangible benefits for the citizens in the form of increased income and improved livelihoods? The disconnect between the macroeconomic indicators and the lived experience of the citizenry underscores the need for deeper analysis and need to develop targeted policy interventions that ensure economic prosperity is more equitably distributed among the population.
Mr. Julius Mukunda, the Executive Director of CSBAG asserted that Uganda is never short of challenges, emphasizing that these issues can be efficiently addressed. In his remarks he extended his appreciation to the government of Uganda and the Ministry of Finance for promoting transparency in the budget processes. “We have been able to get budget related documents and information that we need. This transparency has empowered us to develop concrete alternative proposals and analysis as the civil society,” he explained.
Mr. Mukunda expressed unease over the increased allocations for donations, special meals, drinks welfare and entertainment. He further decried the absence of costed service delivery standards and price list, urging a critical examination of these expenditures for fiscal responsibility. He emphasized the importance for government enforcing fiscal discipline in the appropriation proses and the necessity to rein in on non-performing accounting officers to ensure that public resources are utilized efficiently and effectively for the benefit of citizens.
In attendance was Hon. Matia Kasaija Minister for Finance, Planning and Economic Development who provided the official government position. In his remarks the Honorable minister of Finance noted that government does not have unlimited resources to spend, therefore must prioritize on the most critical needs of the country. “I will not borrow to mortgage Uganda,” he stated. He noted that despite the regular emergence of new demands for supplementary budgets during cabinet meetings, government cannot borrow indefinitely due to limited financial resources to fund development priorities. Hon Kasaija underscored the need for prudent financial planning and strategic allocation of resources to address the country’s pressing challenges without jeopardizing Uganda’s financial stability.
Ms. Sarah Chelangat, Commissioner for Domestic Taxes at Uganda Revenue Authority (URA) emphasized the importance of every Uganda paying their fair share of taxes during her discussion on revenue mobilization. She stressed the principle of tax fairness, highlighting that equitable taxation is vital in raising revenues to fund the essential public services and other development programs. Additionally, she noted that the revenue authority was exploring revenue collections through indirect taxes such as VAT calling for strengthening of the enforcement of the EFRIS system and launching campaigns to promote compliancy amongst the taxpayers ensuring that everyone contributes proportionally to the revenue collection efforts to support development initiatives and improve overall welfare of citizens.
Mr. Mark Mutumba, International Tax Policy Analyst at SEATINI Uganda highlighted an alternative approach to Uganda’s tax policy suggesting that instead of burdening the already struggling Taxpayers, the focus should be on taxing the wealthier individuals (High Net worth Individuals). He noted that many professionals and business community engaged in consultancies and other forms of lucrative forms of work are not being taxes equitably. He pointed out that deliberate and targeted measures must be deployed to ensure that High Net worth Individual are brought into the taxable bracket to generate more revenue while relieving the burden on the most vulnerable segments of the society.
In view of the dwindling foreign aid and escalating public debt that has constrained revenues through high interest payments, it’s imperative for Government to explore alternative strategies to enhance domestic revenue mobilization, and revenue administration to ensure that available resources to meet the many pressing needs of Uganda’s economy.
SEATINI Uganda remains committed to providing technical backstopping support to relevant government Ministries, Departments and Agencies towards aligning the budget to the citizens’ priorities and needs as well as promoting equitable, inclusive and accountable revenue mobilization, allocation and utilisation policies and practices at the national, regional and global level.
