The Ugandan government has no plans of reducing taxes amid the rising cost of living, the Finance ministry has said.
While launching the Budget month for Financial Year 2022/23 at the media centre in Kampala on Tuesday, 17 May 2022, Finance minister Matia Kasaija said the taxes are necessary to fund the budget.
“The budget month increases public awareness of paying taxes. When you pay your taxes fully, you are investing for yourself. You can benefit from what the government is doing with the taxes. The government appropriated and began to execute the programmes as the public required,” he said.
“Removing taxes is not a solution. The solution lies in production for people to get more income, production, and production. We have put so much in the system, use the money to generate more income for yourself. Striking is not solving the problem! The needs of this country are tremendous,” he added.
Government’s move in the fiscal year 2022/23 aims at providing avenues for increasing production in the economy and helping people to generate more incomes by engaging in economic activities for increased household income.
The ministry of Finance said the Economic Policy Framework in the short to medium-term aims at restoring economic activity to pre-pandemic levels and accelerating socioeconomic transformation.
Mr Kasaija said: “Our theme is ‘Full monetisation of the Ugandan Economy Through Commercial Agriculture, Industrialisation, Expanding and Broadening services and Digital Transformation and Market Access,’ and the budget will aim at achieving three broad objectives.”
He said the three objectives are to ensure peace and stability through enhanced security and macroeconomic stability, mitigating the impact of the Covid-19 pandemic and to enhance socio-economic transformation by redirecting budgetary resources towards wealth and job creation, industrialisation, export promotion and other areas with high returns on investment.
Mr Kasaija said despite the economic recess occasioned by the Covid-19 pandemic, the economy continues to show signs of recovery following the easing of the lockdown. The economy is projected to grow at between 3.8 percent and 4.5 percent compared to 3.4 percent by the end of the FY2020/21.
The Permanent Secretary/Secretary to the Treasury, Mr Ramathan Ggoobi, reiterated that government is investing a substantial portion of the budget in the development programmes through the Parish Development Model.
“The budget is pro-poor because the largest share of the budget is going into human capital development. There are no new taxes and we haven’t increased them. We want to make taxes more affordable to pay,” he said.
Mr Ggoobi said the government is focusing on industrial policy and not minimum wage and several initiatives are in place for economic recovery.
“We want to go beyond food and support industrialisation. The wages and salaries of the public servants are going to be done in a phased manner,” he said.