KAMPALA – Bunyaruguru County MP Hon. Cadet Benjamin Buturo has raised concern over the reduction in government funding for domestic arrears, warning that the Shs317 billion allocated for the 2026/2027 financial year could leave suppliers and contractors waiting for decades to receive payments owed to them.
Buturo raised the concern while questioning the Permanent Secretary and Secretary to the Treasury (PSST), Ramathan Ggoobi, during a meeting of Parliament’s Public Accounts Committee (PAC) Central Committee in Kampala.
The legislator questioned why government had reduced the allocation for clearing domestic arrears from Shs1.4 trillion provided in the 2025/2026 financial year to Shs317 billion in the subsequent financial year, despite the growing burden of unpaid obligations.
He warned that maintaining the current allocation would make it difficult for government to clear the existing stock of domestic arrears, estimating that it could take more than 30 years to settle the outstanding payments, even as new obligations continue to accumulate.
Buturo explained that the delayed payments have placed private businessmen, contractors and other suppliers in difficult financial positions, particularly those who have fulfilled government contracts but are still waiting to receive their money.
He observed that businesses supplying goods and services to government are expected to meet their tax obligations, including Value Added Tax (VAT), withholding tax and income tax, despite not having received payment for the work already delivered.
The MP noted that this creates an unfair financial burden on private businesses, which are forced to deal with tax authorities and commercial banks while government delays settling its contractual obligations.
He questioned why Ugandan entrepreneurs should be subjected to such conditions when they have fulfilled their responsibilities, arguing that businesses effectively end up financing government operations without a clear assurance of when their money will be paid.
Buturo called for greater commitment towards clearing domestic arrears, stressing that government should provide a realistic payment plan that protects local businesses, contractors and suppliers from continued financial distress.
His submission brought renewed attention to the impact of government payment delays on the private sector and the need for a sustainable strategy to settle outstanding obligations while preventing the accumulation of fresh domestic arrears.
