The Ministry of Finance, Planning and Economic Development has set the domestic revenue for the next financial year 2023/24 at Shs29.784 trillion amid continued shortage of funds to meet the rising public expenditure needs.
The revenue target for the current financial year is Shs25.550.69 trillion.
But while presenting the Financial Year 2023/24 Budget Strategy at the National Budget Conference in Kampala on Tuesday, Finance Minister Matia Kasaija explained that this Strategy aims at addressing the socio-economic challenges impacting on the livelihoods of Ugandans through monetising the economy, largely driven by the Parish Development Model.
“During next financial year 2023/24, government intends to meet the target of raising domestic revenues by 0.5 percent of GDP in line with the NDPIII annual revenue enhancement target and the Domestic Revenue Mobilisation Strategy (DRMS),” he said.
He added that out of the projected raise in domestic revenue collection, tax revenue and Non-Tax Revenue are projected at Shs27.774 trillion and Shs2.009 trillion, respectively.
This translates into nominal growth in revenue of Shs4.233 trillion (equivalent to 16.6%) up from Shs25.550.69 trillion projected revenue for FY 2022/2023.
This reflects a growth in revenue efforts of 0.5 percent from a projected 14.1 percent of GDP in FY 2022/2023 to the target of 14.6 percent in FY 2023/2024.
Mr Kasaija said in line with the programme, each Ministry, Department and Agency is expected to pursue its priorities under the Third National Development Plan, which in turn will lead to the realisation of Uganda’s socio- economic transformation agenda.
He said while substantial progress has been achieved, more is expected in the next fiscal year as detailed in the four key areas identified. As such, prioritisation of resources will be required throughout the process to investments of high value and returns.
Meanwhile, the resource envelope for FY 2023/2024 will not have any significant changes from that of this FY2022/2023, adding that the preliminary resource envelope for next financial year will be issued in the First budget call circular for FY 2023/2024.
Mr Kasaija said the Public Debt Management for next financial year 2023/24 will continue to be guided by the principles set out in the Public Debt Management Framework 2018, the National Development Plan, and Uganda Vision 2040.
“Focus will be on utilising grants (where available) and concessional financing to implement projects within priority areas of government. Going forward, gradual fiscal consolidation will lead to a decline in public debt below 50 percent of GDP in nominal terms,” he said.
“Priority shall be accorded to contracting debt on concessional terms to lower interest payments; and obtaining debt service rescheduling through a Debt Service Suspension Initiative which would offer additional fiscal space.”