The permanent secretary to the Ministry of Finance, Planning and Economic Development and secretary to treasury Keith Muhakanizi yesterday announced that 5002 billion shillings has been released to ministries, departments and agencies for the Quarter Two expenditure.
A total of 1.18 trillion shillings according to Muhakanizi, is going to wages, 436 billion to Uganda National Roads Authority (UNRA), 309 billion to local government grants including education capitation grant and development grants, 131 billion to National Medical Stores (NMS) for essential medicines and drugs, 109 billion to the Road Fund and an additional 33 billion for salary enhancement for teachers.
Addressing reporters about the release at the ministry, Muhakanizi said the expenditure limits for Quarter II were issued on 2nd October 2019 as the ministry’s commitment to release funds before the 10th day of the first month of the quarter for central and local governments to ensure timely execution of government programmes.
The expenditure limits, he said, were based on government annual cash plan budget adjusted to take into account revenue performance in quarter one and projected revenue collections for quarter two of financial year 2019/2020.
Muhakanizi announced that beginning next financial year, all funds meant for decentralization functions will be sent to local governments directly and not MDAs as it has been to avoid delays.
“Whereas we do communicate the expenditure limits by the 10th day of the first month in quarter, we have noted that some MDAs that transfer funds to local governments at times delay transfers,” he said.
“Accordingly, effective next financial year, all funds meant for implementation of decentralization functions will be sent directly to local governments to avoid delays in service delivery.”
Below is the summary of the cumulative releases for the first half of the FY 2019/20.
Wage (2402 billion)
UNRA (1023 billion)
Ministry of Defense (831 billion)
Local Governments (740.5 billion)
Ministry of works (660 billion) including 445 billion for Uganda Airlines
Parliamentary Commission (294 billion)
Police (286 billion)
National Medical Stores (NMS) 259 billion
Ministry of Water and Environment 224 billion
Ministry of Energy and mineral development 243 billion
Road Fund 218 billion
The approved budget for 2019/20 financial year was 40,487,903,335,285 (forty trillion, four hundred eighty-seven billion, nine hundred and three million, three hundred thirty-five thousand, two hundred eighty-five shillings).
The overall net revenue target for FY 2019/20 according to Muhakanizi is 20,448.73 billion and is broken down into tax revenue of 18,877 billion and non-tax revenue of 1,571.43 billion.
The overall revenue collections for the period of July to October 2019 amounted to 5,467.78 billion against the target of 6,071.47 billion shillings.
“This translates into gross of registering a deficit of 603.69 billion (10% below the target),” said Muhakanizi
He also noted that income tax collections were 1,542.61 billion against the target of 1,620.78 billion registering a deficit of 78.17 billion. 32.67 billion was collected in rental tax while 32.67 billion was collected in corporate income tax.
The value added tax (VAT) and excise duties amounted to 1,297.80 billion against a target of 1,559.70 billion registering a shortfall of 261.96 billion shillings.
Muhakanizi attributed the poor performance of consumption taxes to government policy to ban sachets alcohol, reduction in production of beer, excise duty on mobile money among others.
“The poor performance of consumption taxes during quarter of July – October is attributed to a deficit of 22.96 billion on excise duty on spirits occasioned by government policy to ban sachets and minimum limit of packaging to 200 ml. The production of beer reduced by 6.49 million litres while sales reduced by 4.51 million litres in the first four months of FY 2019/20 compared to same period last year”
“The deficit of 20.52 billion and 5.79 billion on 0.5% duty on value mobile money transactions and 15% excise duty on mobile money charges accounted for drop in number and value of high value mobile money transactions,” he said