Gov’t wants Shs100 tax increment on fuel

Government has proposed a Shs 100 tax increment on fuel in the 2018/2019 financial year with the aim of raising Shillings 202 billion for road maintenance.

"In the roads and works sector, Government will scale down on new projects and shift focus to road maintenance. Shillings 100 tax will be imposed on fuel to raise about 202 billion Shillings annually for road maintenance." reads part of the 2018/2019 financial year budget frame work paper.

This is one of the proposed reforms by government mentioned in the frame work paper with the aim of addressing the current budget implementation and governance challenges.

The Finance State Minister, David Bahati tabled the budget framework before parliament last week. The paper lists new policy and administrative measures, which government intends to undertake in the next financial year.

They include among others halting of the creation of new agencies, administrative units and public universities.

"Freezing the creation of new units is necessary for Government to create financial space to accommodate implementation of a comprehensive pay reform for all categories of government employees, starting in financial year 2018/2019. Relatedly, the policy of one secondary school per sub-county and a technical school per constituency will be reconsidered," reads the framework paper.

The Finance, Planning and Economics Development Ministry, also recommends that government stops extending grants to private schools and hospitals starting the 2018/2019 Financial Year on onwards.

The paper also shows that government plans to freeze all planned recruitments under all sectors such as health and education except under very special circumstances.

Government says the recruitment will strictly be done on replacement basis and also say there will be no selective pay awards to avoid agitation and piece meal management of the pay increment pressures from the individual employee cadres.

The finance ministry says all enhancements will be addressed in the comprehensive pay reform.  "In line with on-going Public Finance Management (PFM) reforms, effective financial year 2018/2019, all Non Tax Revenues (including Appropriation in Aid) will be collected by Uganda Revenue Authority, channeled to the Consolidated Fund and released normally to the Treasury Single Account (TSA) for the spending institutions," states the budget framework paper.

Also effective the 2018/2019 financial year, there will be no more creation of special funds, which the Finance Ministry says normally results in disjointed interventions and fragmentation of resources that in most cases do not create the desired impact.

The Sectoral Committees of parliament are expected to discuss and adopt policy statements from the Ministries, Departments and agencies. The policy statements spell out areas of focus in the ministries, unfunded priorities and the total budgets.

The Budget Committee of parliament is also expected to scrutinize the proposals in the budget framework paper and write a report to parliament for approval.