Private sector, donors welcome budget
Publish Date: Jun 09, 2011
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By David Mugabe

THE private sector and the donor community have hailed the 2011/2012 budget for the pronouncements on containing wastage of resources.

They are, however, weary of the slow process of implementation of the decisions.

The Private Sector Foundation boss, Gideon Badagawa, described the budget as balanced, but said the Government needs to strengthen the capacity of line institutions.

“The problem is the implementation machinery. I will not be happy until I see things change. The pace of implementation concerns who is going to do what and if they are not doing it, why?” Badagawa said.

He said for the tax break on paraffin to have impact, there should be a regulatory authority so that middlemen do no profit from the intervention at the expense of the ordinary man for whom it is intended.

In her maiden budget speech, finance minister Maria Kiwanuka proposed a 50% and 30% reduction on advertising and allowances for external meetings (workshops, seminars) in all ministries.

The move is aimed at addressing wastage and laxity.

The European Union head of delegation, ambassador Roberto Rudolfo, said they would make an appropriate response to the budget once they have analysed it.

“It is too early to say whether it is a good budget but the idea of building the foundation is good. We would also like to see actions following the words,” said Rudolfo.

A cross section of lobby institutional heads in the private sector and the Government also hailed the budget for the continued focus on improving infrastructure and the drastic responses to inflation.

Uganda Revenue Authority commissioner general Allen Kagina said this year’s revenue target of sh6.3 trillion, up from sh5 trillion of 2010 is attainable. “Last year you asked me the same question; whether we will beat the shortfall by the end of June. There is no reason why we will not,” she said.

Kagina said although there would be a shortfall because of the tax break on paraffin and sugar, this would spur increased economic activity.

“The reductions were strategic to help the poor,” she said.

Kagina added that Uganda is still under the sub-Saharan GDP tax ratio of 18%, but this was bound to increase.

“Every year, there is a small increment. If there are no shocks, it should go beyond the 12.9%,” said Kagina.

Jane Rintoul, the DFID head of office Uganda, praised the decision to contain unnecessary spending on meetings like workshops.

She also hailed the decision to allocate more funds to health, which is in line with UK’s priority areas.

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