Matia Kasaija, Finance minister. PHOTO/FILE

Government of Uganda spent two times more than planned during the month of July 2021 amid low tax collections and limited donor support to the budget for the new financial year.

According to the Ministry of Finance Performance of the Economy monthly report, Government sent Shs2.6 trillion in July, higher than the planned Shs935.8b.

According to the report, the non-wage recurrent expenditure exceeded its target by Shs188.5b. Another Shs490b was spent on the purchase of machinery and equipment under the Ministry of Defence, while Shs110b was spent on the purchase of MPs’ vehicles.

The non-wage recurrent expenditure was driven by additional resource requirements to support the health sector as well as provide for cash relief to the vulnerable population affected by the Covid-19 related lockdown.

In July, government had a shortfall in revenue collections. During the period, government collected Shs1.384 trillion, which represented a 90.6 per cent performance against the planned Shs1.528 trillion.  Of this, Shs1.3 trillion was tax revenues while Shs39.6b was non-tax revenues. Direct domestic tax collections amounted to Shs449b against the planned Shs416.4b, mainly due to good performance of Pay As You Earn, which exceeded the targets by Shs36.29b.

Revenue collections were affected by restrictions imposed to curb the spread of Covid-19, which slowed down economic activity during the month.