Why Gen. Museveni keeps increasing budget ceiling every year however unrealistic it might be

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Mr. Lugolobi, as a delegate of MUSEVENI read the shs44.7 trillion budget for the 2021/2022 financial year. The reason Museveni Keeps increasing the budget ceiling, however unrealistic it might be, is because Museveni wants to keep on getting bigger supplementary budgets.

By Obedgiu Samuel
Deputy National Youths Coordinator and Regional Liaison Officer National Unity Platform Northern Uganda.

Under the law government can’t seek a supplementary from parliament that’s beyond 3% of the budget threshold. That’s why these budget thresholds will keep going up unrealistically, even at the time of distress like during covid.

The greatest share of resources is towards debt related payments, inclusive of domestic arrears at 38 per cent. Even before money goes to things like education and health and human capital development, 19% of the budget will go to debt refinancing (8.5 trillion), which is borrowing to pay debts the country has acquired on the public market through treasury bills and bonds.

5 trillion will go to paying interest on loans. Servicing debts accrued as a result of low absorption by ministries, departments and agencies is a wastage of resources. Parliament should not approve loans for ministries, departments and agencies that have absorption rates lower than 60 per cent at the time of the request.

According to data in the National Budget Framework Paper for Financial Year 2021/22, out of a Budget of Shs45.7 trillion, about 56 per cent of these collections will go towards external debt repayments, project support, domestic refinancing, arrears and recapitalisation, whatever these mean. Effectively then, only Shs20.9 trillion will be available for spending under the medium-term expenditure framework.

On the taxes, that are supposed to fund the budget, it’s interesting that Museveni added a 12% excise duty on concerting airtime to data. Yet the World Bank is giving them money to increase access to the internet
Beginning July 01, Internet users, motorists and consumers of both alcoholic and non-alcoholic beverages will be required to dig deeper into their pockets to fund the national budget’s expenditure after Parliament on the last day of last month (April 30th) endorsed a range of government’s proposed taxes in a frantic move to raise revenue to fund its expenditure, some of which are wasted while others continue to remain questionable.

Under the Excise Duty Amendment Bill, 2021, that was endorsed by Parliament, Internet users will have to dig deep into their pockets to pay a 12 per cent levy on Internet bundles, even after the tax proposal was strongly opposed by the private sector let alone the civil society organisations.

Government’s assumption that the Shs100 increase on the fuel pump price will not distort the cost at which the final consumer purchases fuel is wrong, according to transporters. It is such view based on what the transport sector players describe as a result of shallow research that makes taxpayers to become skeptical of many tax proposals and measures fronted by the executive arm of government and endorsed by parliament-the other arm of parliament.

Save for the government’s penchant to overburden tax payers, it is not yet clear why tax on data bundles was passed despite opposition across several quarters.

All landlords will pay rental tax at same rate of 30 per cent.
The Bill proposes to increase the rental income tax rate for individuals from 20 per cent to 30 per cent, similar to that of non-individuals.

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