Kampala, Uganda – As the Ugandan government seeks to diversify its revenue streams, a tax expert has urged the Ministry of Finance, Planning and Economic Development (MOFED) to explore alternative options for domestic revenue mobilization.
“Government has a duty to demonstrate to its taxpayers that tax paid is put to good use. Tangible evidence is necessary in form of construction of good public and feeder roads that reach to the ‘muntu wawansi’, improve public health service and consider rolling out a robust health insurance for all,” said CPA Zuriat Nakayenga, a member of the Taxation and Economic Policy Panel of the Institute of Certified Public Accountants of Uganda (ICPAU).
According to CPA Nakayenga, the government’s reliance on external borrowing, which stands at UGX 80.8 trillion, is unsustainable. Instead, CPA Nakayenga advocates for prioritizing taxation and non-tax revenue streams to bridge the 45% budget gap.
“MOFED should consider prioritizing building public trust. A Ugandan should not be seen dying due to failure to access essential healthcare. Government should add tax education to the curriculum right from primary school to tertiary institutions to increase the awareness on the importance of paying tax and to reduce tax evasion and tax avoidance and limit public protests taxes,” CPA Nakayenga emphasized.
The expert also recommends leveraging royalties from natural resources like oil, gas, and minerals, as well as strengthening public-private partnerships to deliver capital-intensive public projects. By diversifying its revenue streams, the government can reduce its reliance on external borrowing and ensure sustainable economic growth.
“Obtaining Tax identification Numbers and filling of returns should be made compulsory for all. In Kenya today, small Government bonds can be accessed through ‘Mpesa’, a mobile money platform. The Government of Uganda has got to rethink strategy on how to fund the 45% Budget in F25/26 through optimizing tax collection and devising strategies to tax the informal sector,” Nakayenga added.
As the government prepares to fund the 45% budget gap in the 2024/2025 financial year, Nakayenga’s expert opinion highlights the need for innovative and inclusive approaches to domestic revenue mobilization. By prioritizing taxation, non-tax revenue, and alternative revenue streams, Uganda can unlock its economic potential and achieve sustainable development.
