The money earned by the government is called income. Uganda gets money from different sources. These sources are;

Taxation
The main source of government revenue is taxation. Government created Uganda Revenue Authority (URA) to collect taxes in the country. We have direct and indirect taxes in Uganda. Direct taxes are paid directly by the people. Some pay the money directly to revenue officers or have their salaries deducted.

This is called Pay As You Earn (PAYE). Indirect tax is paid by consumers on goods and services. All goods sold in the country are taxed and consumers also pay taxes on those goods.

Income tax

This is a type tax paid by civil servants who earn monthly salaries and business people. This kind of tax is called PAY AS YOU EARN (PAYE).

Value Added Tax (VAT)

This is a type of tax paid on goods and services by all consumers. It replaced Sales Tax and Commercial Transactions Levy.

Property Tax

This is a type of tax paid by property owners to city and town authorities. It varies from the amount of space and the quality of buildings.

Local service Tax (LST)

This is a type of tax paid to local authorities by all employed people. It replaced the graduated tax which used to be paid by all able bodied people above the age of eighteen years.

Excise duty

This is a type of tax paid on goods locally made in a country.

Customs duty

This is a type of tax imposed on goods that are imported into Uganda.

Tourism

This is the business of providing services to tourists. Government earns revenue as the tourists pay for the services available.

Licences

This is tax charged by government for one to provide a service or to enjoy a given service. For example one needs a licence to operate a business, to own a gun or get a driving permit processed among others.

Donations and gifts

This is money and materials the government gets from other countries or international organisations to meet the needs of the people. Donations are not paid back.

Loans

This is money given to the government by another richer country or organization for a particular purpose and is to be paid back with interest.

Grants.

This is financial aid to needy countries. This is money that is given by another government or another organisation to be used for a particular purpose. It is not paid back.

Sale of government bills

This is a type of investment sold by the government in which a fixed amount of money is paid back on a certain date.

Sale of government properties

Government also gets money from sale of properties. This is called privatisation.Privatisation is the transfer of ownership of government parastatals to private owners.

These private owners also pay taxes to government. Parastatals are profitable companies that render services to people.

Examples of Companies that have so far been privatised include;

• Uganda commercial Bank,
  
• Uganda Hotels
  
• Uganda Foods and Beverages company,
  
• Uganda Garments Industries Limited,
  
• Lint Marketing Board,
  
• Coffee Marketing Board among others.

 

Activity

1 . Imagine that you are given 50,000/- to prepare a budget for a birth day party. Make a list of items that you would spend on your money.

2.Why do you think it is important for every family/school to make a budget before spending.

3.Draw a diagram showing a surplus budget.