UNICEF: Uganda’s falling domestic revenue putting children under threat

A new report by United Nations Children’s Fund (UNICEF) has revealed children will likely suffer the most from Uganda’s  falling domestic revenue caused by economic contraction exacerbated by Covid-19 induced lockdown. 

Despite President Museveni having partially lifted the lockdown on July 31, many other businesses including schools, bars, and entertainment centers remained closed. This  has had a negative impact on economic activity.

With such economic disruptions still in place, UNICEF predicts value added tax, pay as you earn, and trade and corporation tax payments to the Uganda Revenue Authority (URA) to slump in fiscal year 2021/22.

Data shows that in May, Uganda’s total revenue and grants amounted to approximately Shs1.5 trillion against a target of Shs1.68 trillion, mainly attributed to underperformance of tax collections.

UNICEF estimates that based on revenue performance during the first lockdown in 2020, URA may have lost at least Shs350-450 billion in tax revenue in the month of July 2021. 

According to research by UNICEF, such revenue slumps usually lead to disruptions in disbursements to ministries and departments which in most cases largely affects children.

“Unfortunately, children are likely to suffer most from the late disbursements of funds because this has a bearing on the delivery of essential services such as health, social protection, water, and sanitation.” UNICEF report says.

The report further shows that due to the financing gaps, social protection responses have not been commensurate with the increasing levels of vulnerability and deprivation among children. 

It’s worth noting that government spent Shs60 billion in the previous fiscal year on food distribution to 683,000 households covering 1.9 million persons, in the Kampala Metropolitan Area.

However, this according to UNICEF is significantly lower than the total number of the most deprived and vulnerable across the country.

UNICEF adds that the government’s COVID-19 relief programmes have been directed primarily at people living in urban areas, leaving out many people including the children in remote areas.