2024/25 Budget: Inflation, high gov't expenditure worries tax and policy experts
Drake Nyamugabwa
Following the issuance of 2nd budget call circular which projected the the budget estimates for FY 2024/25 at UGX53.336 Bullion and increase from the previous year's budget that was at UGX52.78 Billion, tax and policy experts have raised concern over the increased expenditure with reduced budget support and expected increase in inflation.
The Executive Director of Centre for Budget and Tax policy Mr David Walakira during a press conference held on the 3rd April 2024, said that budget support is projected to reduce to UGX311.16 Billion in FY2024/25 with the reduced government resources.
"Reversely budget support is projected to reduce to UGX311.16 Billion in FY2024/35 from 2 781 Billion in FY2023/24. In norminal terms, the Govt resource envelope will reduce from UGX 36.13Trillion to 34.67Trillion. in real terms based on the price level for FY2021/22 with headline inflation at 3.4% the government resource of 14% will be cut off" he said.
He said that the government recurrent expenditure is very high compared to the development expenditure which he said will affect budget funding and implementation.
Mr David while commending govert for the prudent financial management of public funds, said that on the fiscal consolidation front the government is making strides in the right direction based on the sustained reduction of fiscal deficit for three previous years.
He however said that in order to enhance revenue mobilisation, there is need to through strengthening the social contract of the tax system and rationalisation of tax expenditure which need more effort from government agencies.
