Taxes are set to jump sharply as imposed tax-revenues have been increased while commodities prices are likely to upsurge, said experts
The general state budget bill for the 2022/2023 financial year adopted by the Cabinet on the 1st of June, 2022 stipulates that overall revenue will rise to BIF 2,193.6 billion in 2022/2023 from BIF 1,562.06 billion in 2021/2022, which is an increase of 40.4%.
“Citizens should also help contribute for the annual projects as the 2022-2023 annual budg records a shortage of almost 200 Billion BIF,” said Domitien Ndihokubwayo, Burundi Finance minister while presenting the project to the national assembly last week.
The 2021/22 fiscal year recorded a budget deficit of 100 billion BIF, also said the Finance minister, adding that adequate measures will be taken to close the deficit hole.
“The fiscal year 2022/2023 state budget forecast holds high tax increases as revenues have risen by +481.1 billion compared to the previous year”, said Gabriel Rufyiri, president of OLUCOME, a Burundian anti-corruption watchdog in a press conference in mid-June.
He added that the 40.4% [that is 687,54 Billion] rise in overall revenue of the proposed state’s general budget will weigh heavily on Burundian taxpayers, mainly the low-income people who are already suffering from extreme poverty.
“Taxes on sugar, fuel, beer and lemonades, including Brarudi (brewery industry) products, will be heavily tinted. This will drive up the price of food and basic necessities”, said Rufyiri.
He, however, commended the initiative as it seeks to combat bribery and embezzlement.
The fiscal year coupled with pressure on soaring food products on the markets and fuel prices. Households keep experiencing the rise of prices on first commodities mainly rice, beans, maize flour, cooking oil, fish, and meat.
“Prices keep rising. A kilogram of rice has jumped up from BIF 1600 to BIF 3000,” says Mireille met at the Bujumbura city market.
The prices almost doubled especially for the main products, she added.
For Ange, it is hard to feed her kids, with BIF10, 000 a day as she cannot get anything needed.
“Look, 50 kilograms of maize flour known as Kaunga now costs BIF 50, 000 , and 5 liters of cooking oil cost BIF 22, 000”, she said.
Besides, the scarcity of petrol has added insult to injury. This has caused turmoil in different cities due to long queues at fuel stations and in public transport
At bus stations, long queues are observed from 1 pm. Drivers say it is a problem of petrol, fuel, and gasoline shutdown.
“Spend a day searching or queueing for petrol is so tiring. I am obliged to stop other activities”, said Juma met at Kwa Katikati station.
Today, the pressure has slowered, but it is still hard to get to the pomp, he added.
Experts say that some products have become a prestige of well-off families since poor families can hardly afford sugar, cement and fish among others.
“The scarcity of these products remains a concern for the country as they are the most needed”, said Noel Nkurunziza, president of ABUCO, the Burundi’s consumers association.
He added that missing out of these products have ruled out prices since they are sold illegally at high prices.
As of February 2022, ISTEEBU which is a state-owned statistics entity reported that annual headline inflation (annual average change) was +9.4% compared to 8.8% due to prices of food products, which rose by 11.4% in January.
The rise to +9.4% was the highest recorded in the past five years. In 2017, inflation stood at -2.8%
According to the same report, food and non-alcoholic beverages inflation were listed first with +11.5% whereas alcoholic beverages and tobacco registered a +5.6%, gas and other fuels +8.9%.
“In February 2022, the annual average inflation rate measured by the food index excluding non-alcoholic beverages and restaurant services stood at +11.5%, compared to 10.9% of January”, reads the report apart.
In addition, transport registered +2.3% while other goods and services had +4.2%.
As of the state budget, according to the Cabinet, the proposed state bill for the 2022/2023 budget year runs counter to result-based budgeting, where money’s allocations are made on the basis of well-planned projects to allow complete shift to ‘programme mode’ budgeting for the 2023/2024 budget year.
While a revision of the income tax law to broaden the category of taxpayers is expected, the ministry of finance must know beforehand the projects to be implemented.
“All budgetary expenditures should be subject to the prior approval of the Minister of Finance and executed considering available resources”, said Prosper Ntahorwamiye, the secretary and spokesperson of the government of Burundi.
This year’s annual bill is expected to kick start on July the 1st, 2022 from which different entities will abide by project ‘programme model’.
According to economists, the government, by introducing the programme mode, wants to strengthen projects designed to fight poverty as Burundi is still ranked among the poorest countries in the world.
“There might be many hidden reasons of this change in the annual budget bill”, said Prosper Niyoboke, Economic expert and former Dean of the Faculty of Economics at Lake Tanganyika University.
He added that the programme budget baseline springs in project-oriented schemes which stretch from one to two years.
It looks forward to enhancing organizational performances while sustaining transparency, he said.
“Generally, the government’s different institutions will have to design programmes, provide expected results, and work on known schedules”, he concluded.
Observers go on saying that ongoing projects will have to be executed on tasks-responsibilities-results curriculum along with follow-ups for each stage.
The 2022/23 fiscal budget bill will fund mainly sectors aimed at developing the Burundian socio-economic life such as agricultural sector, infrastructure including railway project, youth employment, security sector, as well as health, education, digital public finance sector.
