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The COVID-19 Pandemic: The journey towards resuscitating the economy of Uganda: An opportunity not to be missed

27th April 2020

KAMPALA, UGANDA – Private Sector Foundation Uganda (PSFU) has had many discussions with Government, in particular Ministry of Finance, the Prime Minister, various key players and partners to devise measures on how the economy can be revived during, and post COVID-19 pandemic. We see it as an opportunity to rethink and restructure our economy for a dynamic and sustainable future for Uganda, the region and Africa. It is a definite challenge to change our mindset and understand how the economy of the world is organized. Therefore, we are convinced that Government and private sector must work together in order to succeed.

Some of the intervention areas were proposed for Government’s consideration as listed below;

Pay all domestic arrears (money owed by Government to companies & individuals in Uganda). This will increase liquidity in the economy. A list has been provided to Government.

Under Domestic Tax:

  • Deferment of Payroll Tax payments to ease business cash flows for the next 6 months
  • Payment of Outstanding VAT refunds by Uganda Revenue Authority
  • Proposal of Turnover-tax (for those companies who file losses to URA) in the current budget proposal should be postponed to next FY (21/22).
  • Tax on rental properties be frozen for six months effective April 2020 and no taxes should be increased on rental properties.
  • Lower taxes on products produced with locally sourced raw materials.

Financing:

  • Restructure Uganda Development Bank (UDB) to manage the new development bank dynamics
  • Capitalize UDB so that it can effectively support the financing requirements of Ugandan entities.
  • Support the tourism sector with a line of financing through UDB
  • Improve the Administration and structure of the Agriculture Credit Fund
  • Enact the NSSF (amendment bill) 2019 to increase the supply of long term financing for a cheap source of resources.

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