The Minister of State for Finance, Planning, and Economic Development (general duties)Henry Musasizi has stressed the urgent need to broaden the tax base as a crucial strategy to reduce the nation’s debt burden.
The Minister, who was discussing the state of the economy on a local broadcast on January 23, 2025, said in ensuring continued debt sustainability, there was a need to sensitize on the importance of expanding the tax base.
“We must improve on the tax administration challenges we have and create the desired efficiency in tax administration. The strategy will be essential for generating the revenue necessary to support government obligations,” Musasizi said.
According to the Ministry of Finance, compared to many other countries, Uganda has a narrow tax base, with tax collections totaling less than 14%; the average for sub-Saharan countries is 18%.
Musasizi voiced a concern about recurrent financial discipline among accounting officers, pointing out instances where contracts were signed without proper budgeting.
“There is an issue of indiscipline with accounting officers; why should an accounting officer commit government when there is no budget?” he questioned
Musasizi revealed that the current debt-to-gross domestic product (GDP) ratio stands at 46.8%, with a maximum target set at 50%, warning of a deteriorating financial threshold.
He, however, noted that currently the situation is manageable as the government’s debt sustainability strategy remains robust.
Looking forward, the Minister outlined ambitious plans under the National Development Plan IV (NDPIV), set to commence in the 2025/2026 financial year, targeting the nation’s GDP to reach $500 billion by FY2038/2040.
“This will be our first year of implementation, and we are committed to achieving this target,” he stated.
The minister’s remarks emphasized the government’s commitment to economic stability and growth while addressing challenges in financial management and accountability.