Ugandans to brace for heavier tax burden as donor budget support nosedives from Shs 224 billion to Shs 44 billion
The 20152016 national budget, which is to be presented in the next two months, will hit a record Shs 18.3 trillion, the biggest in Uganda’s history. The Shs 4.1 trillion, which the government intends to borrow from the Chinese Export and Import Bank (EXIM) of China for infrastructure projects, has contributed to the meteoric rise.
Finance ministry officials told journalists April 1 that the rise in external debt to finance Karuma Dam and other projects had contributed significantly to the rise. With more borrowing expected for the Standard Gauge Railway, there is concern about Uganda’s total debt, which currently stands at close to Shs 20 trillion, becoming unsustainable. However, Lawrence Kiiza, the director of economic affairs at Ministry of Finance, Planning and Economic Development, dismissed this notion saying the debt was necessary.
According to next year’s Budget Framework Paper, which was presented to Parliament on April 2, URA will be tasked to collect a record Shs 10.7 trillion up from Shs 9.3 trillion in the current financial year. Under the theme ‘Maintaining Infrastructure Investment and Promoting Excellence in Public Service Delivery of Uganda’s Economy,’ the budget strategy for the FY 201516 would prioritise ongoing infrastructure projects, embark on new ones where feasibility studies have been completed and resources mobilized, and accelerate the preparatory process for various projects. Under the new law, the framework paper is supposed to receive parliamentary approval.
Source : The Independent