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URA might miss the 2024/25 tax collection target, says Nalunga

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Ms Jane Seruwagi Nalunga, the executive director of Southern and Eastern Africa Trade Information and Negotiations Institute. PHOTO/File

With the reading of the budget speech last week on Thursday, what are your thoughts so far about the overall process leading to the delivery of the speech highlighting income and expenditure for the financial Year (FY) 2024/25? 
The process has been quite engaging. The Ministry of Finance engaged a wide range of stakeholders including Civil Society Organisations (CSOs) like ours who are deeply involved in national budget and related issues. 
We also took note of some level of engagement with the private sector and academia involvement. Consultations done during the National Budget Month should continue and new ways to make it more vibrant should be explored.

And it wasn’t only Parliament that didn’t get enough time but we also think the general public didn’t get ample time to follow and understand the Shs14 trillion corrigenda which was approved in less than a week.  The limited time given to the legislators to scrutinise and debate the additional Shs14 trillion presented through the corrigenda increasing the FY2024/24 budget from Shs52.7 trillion to Shs72.1 trillion, is something that shouldn’t become a fixture at all. 

So what we saw in this budget about the corrigenda which means correcting an error could pave way to abuse and we have to guard against that. 
We also believe that changes in the draft budget should not create additional pressure on items or result in arrears. Any changes must be supported by relevant documents while ensuring the corrigenda isn’t used to request extra resources for a vote apart from Ministry, Department, and Agencies transferring funds to Local Governments. 

What awaits this national budget? 
Financing of the FY2024/25 National Budget is hinged on the government’s ability to mobilise sufficient resources to finance the various priorities identified in the budget. There is a possibility that the Uganda Revenue Authority may not meet the revenue mobilisation targets. Currently, this financial year’s budget left with just days to end, is already behind target by nearly Shs2 trillion. There is also some uncertainty around the funds expected from grants and loans. Additionally, borrowing at high interest rates might curtail our ability to meet some development goals. It is not yet clear whether there is good will to address the issue of corruption – we shall have to wait and see how serious this matter is handled. 

On a more positive note, the FY 2024/25 Budget is the first National Budget that brings out the issue of how important commercial agriculture, value addition, and manufacturing are to the economy. 
Lastly, there is a need to build citizens’ trust to make it easy for them to comply with tax obligations. 

 That calls for the highest levels of transparency, is that right?
Based on the past practices, there had been limited citizen participation in the implementation phase of the budget. We tend to do more of a postmortem after basing on the audit report by the Auditor General. At this point, it is often late to recover public funds that have either been misused in several ways.  As a result, not many public officials get implicated or held accountable for being reckless with or mismanaging the public funds. We are hoping to see more transparency and participation from both implementers of the budget and citizens or else achieving success without these two will be difficult.    

What don’t you approve that made it through to budget? 
We don’t like the Shs100 increase on a litre of petrol and diesel. This will be passed to the final consumer. And it will have ripple effects on the transport sector and spillover effects will reverberate across the economic sectors.  Ultimately, the consumer will have to deal with a hike in prices of goods and services. 

Funding to the Ministry of Trade, Industry, and Cooperatives remains very low and this affects the coordination and operations of the Ministry, and its affiliated agencies especially given the Ministry’s mandate of formulating, reviewing and supporting policies, strategies, plans, and programmes that promote and ensure expansion and diversification of trade, cooperatives, environmentally sustainable industrialisation, appropriate technology development and transfer. 

We are seeing the same issue in the coffee sector. In the FY2024/25 National Budget, government has allocated Shs13.9billion to a leading cash crop fetching the country a substantial amount in foreign exchange. Without proper funding, Uganda Coffee Development Authority (UCDA) will not commence on the mapping of coffee farms, which is a precursor for a traceability system. 

The total Budget required by UCDA for traceability is estimated to be $9.15m or Shs35.6 billion which hasn’t been made available yet. 
However, the deadline/cut-off date of Uganda to meet European Union (EU) traceability requirements and be compliant is December 31, 2024 which is a limited time to conclude the mapping exercise.

What do you like most about this budget?
Part of the Shs4.9 trillion allocated to the rehabilitation of the meter gauge and standard gauge railway is a commendable gesture. This will boost trade across the EAC due to reduced transport costs and transit times. 

Do you think the budget will deliver on its promises? If yes, explain. If no, why? 
 I think it will deliver on its promises if the government addresses key challenges that have impeded full realisation of budgeted funds in previous financial years. All they have to do is ensure timely disbursement of funds as planned. Be more transparent including in procurement process. 
Transparency is important because it breeds trust and confidence among the population. 
Going by the open budget survey, we need to do better in terms of citizen participation and improve further in transparency. 
As we start the implementation phase of the budget, citizens ought to engage in monitoring key government programmes in their communities and raise flags for any mismanagement of funds.