BUDGET SPEECH HIGHLIGHTS
On 11th June 2020, the Minister of Finance, Planning and Economic Development presented to the country the Budget for the Financial Year 2020/21. Please find the highlights of this budget reading below.
The theme for this year’s budget is Stimulating the economy to safeguard livelihoods, jobs, business and industrial recovery.
Uganda’s GDP is projected to grow to shs 138 trillion in the forthcoming financial year and the economic outlook is on the ‘positive’ according to the Minister of Finance Planning and Economic Development.
The general budget total for 2020/21 is shs 45.493 trillion. Domestic Resources amount to shs 25,585.6 Billion. Domestic Financing amounts to shs 3,560.3 Billion; while External Financing consists of Project Support of shs 9,515.3 Billion and General Budget Support shs. 2,906.7 Billion. Domestic re-financing amounts to shs 7,486.1 Billion and Appropriation in Aid is shs 215.6 Billion.
The total Expenditure amounts to shs 37,792 Billion of which Recurrent Expenditure is shs 19,787.8 billion and Development Expenditure is shs 18,004.2 Billion.
The 2020/21 financial year's revenue target is shs 21.810 trillion, comprised of tax revenue amounting to shs 20.219 trillion and non-tax revenue of shs 1.591 trillion. This revenue target makes up 14.3% of GDP.
As at December 2019 Uganda's public debt amounted to $13.3b, with external debt at $8.59b (64.4%), domestic debt $4.74b (35.6%) of total debt stock. Government intends to enhance domestic Revenue Mobilization Strategy to increase its capacity to finance programs with less reliance on domestic and external borrowing.
To address the short term emergency liquidity requirements of businesses, boost their cash-flows, and ensure business continuity, the minister proposed the following tax relief measures:
- Defer payment of Corporate Income Tax or Presumptive tax for Corporations and Small, Medium Enterprises (SMEs)
- Defer payment of PAYE by sectors affected
- Waive interest on tax arrears
- Provide for Tax Deductability of Donations for the Corona Virus Response
- Expedite Payment of outstanding VAT refunds
The very important Agricultural sector grew by 4.2% in the financial year ending June 30 while the services sector grew by 3.6%.
The Budget highlights measures to improve infrastructure that include: maintenance of roads and bridges across the country and expediting construction of priority industrial parks and special economic zones including the feeder and national road network, power and ICT infrastructure.
On the Education Sector,the Government plans to roll out the new education curriculum, expand access to vocational education, improve the quality of tertiary education, enhance digital instruction in schools and also provide instruction through the electronic delivery mode (radios, TVs and Internet)
For the peace, security and good governance, the government plans to enhance this at the community and national level and improving effectiveness in public service delivery as well as increasing access to justice.
The Minister emphasized that government will tackle corruption by enhancing the efficiency and effectiveness of oversight and anti-corruption institutions in identifying areas of risk, enhance capacity of the Financial Intelligence Authority and related security agencies to intensify surveillance and gathering of vital information to curb anti-money laundering and terrorism financing.
In light of the COVID19 pandemic and its adverse effects, the Minister informed Parliament that there will be periodical reviews to this budget to address any further effects of the pandemic.