By Christine Byiringiro
Published: 1st June 2016
he Government of Uganda has placed infrastructure development at the apex of the country’s macro-economic agenda for over 3 years now to facilitate private sector development as the engine of growth and this is highlighted inter alia in the past budget speeches.
It is for this reason that the biggest chunk of the national cake has always and continues to go towards improving the national road infrastructure, a key function of the Uganda National Roads Authority (UNRA) which was created in July 2008 to develop and maintain the national roads network. This therefore calls for heavy investment in the sector and Government has had to resort to borrowing in order to achieve this.
As the country prepares to listen to the FY 2016/17 budget speech on 8th June 2016, the UGX 26.3 trillion budget already approved by Parliament has the lion’s share allocation of UGX 3.8 trillion to works and transport, up from 3.3 trillion in FY 2015/2016.
Since the money collected through taxes alone cannot fund all the country’s development needs, Government contracts national debt to fund some of them thereby attracting huge interest payments that the Ugandan taxpayer toils to pay. The Ministry of Finance projected that the stock of outstanding public debt would reach US$ 7.6 billion by end of FY 2015/2016 up from US$ 7.2 billion in FY2014/2015. The increase was attributed to the growing need to finance infrastructure investment.
Ideally, debt should be directed towards investments because these are, by their nature, income generating thus the returns are used to service the debt. The ability of such investments to generate returns is therefore critical in assessing the country’s future debt sustainability. Sadly, Uganda is headed towards the opposite direction, reason the national debt resources are diverted towards unjust enrichment by those in positions of responsibility and have previously got away with it.
This partly explains why corruption in the public service sector continues to thrive with the latest scandal unearthed at UNRA. The UNRA commission of inquiry into mismanagement of the Authority’s resources recently exposed massive corruption at UNRA where a total of UGX 4 trillion has gone to waste since 2008 to date. The Commission, set up by the President in June 2015 to inquire into alleged corruption at UNRA found that top officials in UNRA connived with consultants and contractors to swindle the Authority’s funds; no genuine competition for road projects and contractors were paid billions for no work done leading to shoddy work. According to highlights of the Commission’s report published in the New Vision newspaper on 27th May 2016, the Pakwach-Nebbi and Fort Portal-Hoima roads began disintegrating even before they were handed over to the Government!
• The time to put a stop to such impunity is long past but it is never too late to start. Thanks to the President for instituting the Commission but also unlike in the recent past, we now see him begin to progressively fight corruption. Like the saying goes; even the journey of a thousand miles begins with a single step. We can only confirm the president’s resolve to combat the vice as clearly stated during his swearing-in ceremony by such actions.
• That the country now looks to the responsible action centers to implement the Commission’s recommendations would merely be stating the obvious, otherwise the tax payers would have to carry the burden of servicing the debt, pay interest but also incur costs to re-construct and maintain these roads. Such cases however also provide lessons to help us tighten the loopholes as we advance towards development.
We must therefore seize the opportunities and act appropriately as we work towards becoming a middle-income country by 2020.
Members of Civil Society Organizations fronted by Uganda Debt Network (UDN), Civil Society Budget Advocacy Group (CSBAG), SEATINI, Anti- Corruption Coalition Uganda (ACCU), Uganda National NGO Forum, Action Aid Uganda, Food Rights Initiative (FRI) and Uganda Joint Christian Council (UJCC) today gathered at CSBAG offices for a press conference that aimed at appreciating the President of the Republic of Uganda for taking into consideration the voices and concerns of the citizens by rejecting the Income Tax (Amendment) Bill 2016 and sending it back to parliament for re-consideration. When Members of Parliament passed the Income Tax Amendment Bill that exempted their allowances from being taxed, CSO’s launched a campaign to collect citizen’s signatures to petition the President asking him to exercise his powers under Article 91 of the constitution and not to assent to the Bill. 4,201,098 signatures from over 80 districts were submitted to the Office of the Prime Minister last Friday 6th May 2016 at his offices. As CSO’s, we think this is an opportunity for Members of Parliament to show their true commitment to the development of Uganda and not pass this Bill again.
African Development Bank estimates that Uganda losses from tax incentives at least 2% of GDP which would amount to around Ushs 690 billion. The legislators are meant to ensure we have laws that protect our country from such losses and they can only play this role if they are themselves paying these taxes. Also in the spirit of fairness and equity as envisioned by the principles of taxation, legislators should also equally pay a fair share of what they earn. Therefore as part of enhancing Uganda’s tax base, we encourage the Government of Uganda to;
• Develop a fair and more equitable tax justice system that seeks to increase revenue for the country;
• Repeal Article 85(1) of Uganda’s constitution that gives parliament mandate to determine its pay;
• Establish a salary review commission so as to harmonize salaries &emoluments of all public servants and ;
• Strengthen the capacity of URA to curb illicit financial flows, fully implement the Money Laundering Act so as to curb illicit financial flows and establish a mechanism of implementing the recommendations from the high level Mbeki Panel Report that was adopted by African Union in January 2015.
In conclusion, special thanks go to the citizens of Uganda, the media for creating awareness on the implications of this Parliamentary move and the Ministry of Finance, Planning and Economic Development for giving strong technical advice to Parliament that the proposed law would undermine Government efforts to increase revenue for national development. It is our Utmost desire to see that every Ugandan pays his/her fair share of taxes.
Ambassador Gabriel Kangwagye addressing the audience during UDN AGM at Hotel Africana, 29th April 2016.
On Friday 29 April 2016, Uganda Debt Network held yet another Annual General Meeting at Hotel Africana that was widely attended to by UDN members both individuals from different parts of Uganda and UDN constituencies as well as members at Civil Society, Donor community and Government Ministries, Departments and Agencies. Approximately 100 members were present to witness and review UDN achievements for the year 2015.
A representative from Dan Church Aid (DCA) Mr. Musinguzi John thanked UDN for the good work done and applauded her for doing her advocacy work in a diplomatic manner compared to other organizations. He encouraged UDN to continue the good work and document all achievements under one of its thematic areas of Capacity Building and Empowerment to be used as evidence and a reference point for all stakeholders.
The Guest of Honour Ambassador Gabriel Kangwagye commended UDN for her effort in improving and transforming governance in terms of people empowerment, accountability and participation. He acknowledged that UDN work has influenced performance of Public service and has played a role in addressing persistent challenges of balancing the national budget, delivery of social services, good governance and fighting corruption.
To all the stakeholders and funders of UDN work, we appreciate all the encouragement and support throughout the years and thank you for participating in the Annual General Meeting.