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Economic experts forecast tough times ahead for Ugandans following the passing of additional taxes on petroleum products, construction materials bottled water among others in a bid to raise revenues to finance the shs72 trillion budget for the financial year 2024/2025
These say that earnings in the formal sector are not increasing an inch in the next fiscal year yet the cost of living is likely to increase by three fold or more.
The ayes carried the day , in the maximum body policy of Uganda , almost deciding the fate of jobs , economic growth and tax revenue targets for the next 12 months starting July 2024.
This as taxes on petroleum products , construction materials, bottled water among others were passed.
While these were passed here, miles away , at this water bottling plant, things may not remain the same as each of these bottles attracts a shs50 tax thanks to the Excise Duty Amendment Bill 2024.
While one can easily substitute water , affecting the sales of bottled water, as a trader that previously sold 10 boxes would now have to sell 7 or less .
The plummeting of sales might mean that the plant reduces on production. From may be 1000 boxes to just 980 boxes per day. Since production at low capacity carries high costs, management, would only wish to reduce on labor cots rendering many jobless.
The Ugandan real estate sector is yet another that could take a hit in government revenue collection spree as a tax on construction materials like adhesives was introduced.
Experts say that bills of quantities on may change leaving many sites abandoned. Those that might be completed , occupants might have to pay a little more in rent.
“ Apartments that will be completed after this financial year will be more costly than those completed in the previous financial year .“
The pump prices for fuel have for months averaged at shs5530 and shs5100 for petrol and diesel respectively.
However since the proposal imposing an increase of excise duty of shs100 on a liter of petrol and diesel was been passed, the prices of many essential commodities like tomatoes, carrots, onions and others might increase thus causing cost push inflation
“The prices of tomatoes, carrots, bananas and every product will increase because these are brought to the market using highly priced fuel. ”
Emmanuel Ssemugenyi says a tax expert says these new taxes might negatively impact the economy.
“ Many of these taxes are largely consumptive which therefore means that if that consumers have bear this huge burden and their incomes are sticky upwards this might bite hard.”
The experts concur that the economy is headed for uncharted waters and Ugandans should buckle up.
Pressure on your pocket is likely to increase in the next fiscal year and yet your earnings may not.