Govt revises 2017/18 budget downwards

The Minister of Finance, Planning and Economic Development, Matia Kasaija after reading the national budget for the financial year 2015/2016 at Serena Conference Centre in Kampala. Photo/File

The ministry of finance will today in the parliament plenary present the final budget estimates for the 2017/ 2018.

According to the documents to be presented, the total budget has been revised from sh30trillion to sh28.9trillion.

The minister will also along budget estimates present four new tax Bills most of which contain measures for cutting taxes.

Some of the items government has exempted from VAT include sanitary pads, donor-funded projects, agricultural inputs, factories established outside the radius of 50 kilometers from Kampala, sugar confectionaries, and many others.

In a bid to reduce the high power tariffs, government has exempted Bujagali Power Dam from paying taxes on its income.

Debt repayment will take sh9.9trillion which is 34% of the total budget of sh28.9trillion.

The trend at which debt repayment is increasingly taking a bigger portion of Uganda's budget is something that should worry the country top decision makers.

In the 2015/2016 budget, sh6.5tillion of the national budget was spent on debt repayment and in the current 2016/2017 financial year the figure rose to sh7.7trillion.

According to Uganda Debt Network, Uganda's public debt has been sporadically rising from $1.9b in the 2008/2009 financial year to $11b as of last year.

The latest Auditor General's report revealed that a total of sh18trillion government borrowed is lying idle as the country keeps paying interest and commission charges on the loans.

Out of the 19trillion for government expenditure, 16.6trillion will be allocated to the central government and sh2.5trillion will be allocated to local governments.