Experts urge government to prioritize de-risking private sector investment environment to boost revenue growth.
...the budget need to also re-evaluate the contradictions in the budget statement to prioritize not only revenue collection but also the micro economic issues including prices, exchange rate, business capital among others.
A cross section of tax experts and economists have said that in order to strengthen confidence for investors and create safe business environment that will raise revenues to recognized levels, there is need to focus on supporting the private sector through measure that will reduce risks in investment to enable them increase production, demand among others.
While discussing the recent read 2021/22 budget in a post budget webinar organized by Ernst and Young (EY) on 11st June 2021, Fred Muhumuza, Economic Lecturer at Makerere University said that the budget needed to address a number risks including affordable financing to private sector in the medium term, the low aggregate demand, the low production level among others.
He added that the budget need to also re-evaluate the contradictions in the budget statement to prioritize not only revenue collection but also the micro economic issues including prices, exchange rate, business capital among others.
“If government is considering large industrialization, should also consider the users by addressing the cost of production and subsidies to factories. More borrowing should be expected in the short and long term loans. The program based approaches at government levels need to be rationalized to raise the revenue at recognizable levels. Government needs to address a number of risks to the private sector” he said
He said that the budget estimates needed to also align with the current changing trends on the ground created by the pandemic which he said will call for a flexible budget in revenue and expenditure expectations.
Sarah Chelangat a Senior Tax Tutor (in picture above) said that the East African states in their individual budget statements for next financial year have forgotten the benefits of harmonizing their budget proposals and themes. She said that the Council for east Africa ministers should address the issue of bilateral concerns that has been exhibited to strengthen unity, globalization, and business visibility.
During the budget statement reading by Amos Lugoloobi, State Minister for Planning in the Ministry of Finance, Planning and Economic development on 10th June 2021 at Kololo, the new minister highlighted that on the COVID-19 emergency response despite the adverse impact of the COVID19 pandemic, the economy has remained resilient, partly as a result of quick and strong Government response.
He added that to minimize the negative impact of COVID 19 on the social and economic welfare of the country, direct fiscal interventions totaling to 2.6 trillion were implemented and an addition, 7.3 trillion private loans in commercial banks were restructured, as part of the stimulus package to support household economic welfare, firms to survive the crisis and maintenance of financial stability to avoid the potential collapse of the economy
The Minister also said that the pandemic presented an opportunity to digitaly transform the economy.
“ICT is key to enhancing socio-economic transformation and for improving efficiency and productivity. The COVID19 pandemic has presented the opportunity for digital transformation of the economy.Therefore, the major priorities for Financial Year 2021/22 will include the extension of broadband ICT infrastructure up to the sub-county level; expanding the Digital Terrestrial Television and Radio Broadcasting network to facilitate tele-education for learners; and facilitating the development of software solutions to support eGovernment, eCommerce and ePayment, among others’ the statement partly reads