The week, which started on June 28, has been action-packed in the business sense. From the scrapping of OTT to the IMF loan, we bring you business events that dominated the week.
Enter New Financial year
On Thursday July 1, Uganda started a new financial year, 2021/2022. With it came new taxes or amendments to the old ones, to which critics deem as a tax laden year.
At the same time, government is worried about the rising public debt. Finance minister Matia Kasaija early in the week revealed his discomfort with the current public debt levels, saying government will be extremely cautious on acquiring new debt going forward.
Appearing before Parliament, Mr Kasaija said as of December 2020, total debt stock was $17.96b (Shs65.83 trillion), an increase from $13.3b (Shs49.0 trillion), more than Uganda’s National Budget, as of December 2019.
Of the $17.96b, external debt is 64.98 per cent standing for $11.67b (Shs42.6 trillion) while domestic debt is 35.02 per cent standing $6.29b (Shs22.9 trillion).
In the same breath, experts have urged the government to cut unnecessary expenditure, arguing that the economy is once again expected to take a nasty hit from the global pandemic.
Ramathan Ggoobi, a lecturer of economics at Makerere University Business School, said it will be hard for the government to realise the revenue mobilisation targets set in the coming budget, meaning, therefore, that the Government must be frugal in expenditure.
IMF Approves Shs3.5 trillion for Uganda’s Covid-19 recovery
The International Monetary Fund (IMF) on Monday approved a 36-month arrangement under the Extended Credit Facility (ECF) for Uganda amounting to $1 billion (about Shs3.5trillion) to help in mitigating the effects of Covid-19.
The arrangement is also meant to boost COVID-19 recovery and the authorities’ plan to increase households’ incomes and inclusive growth by fostering private sector development.
A mild recovery in Uganda is underway in some sectors, with economic growth in FY 21/22 expected to reach 4.3 percent before returning to pre-pandemic rates of 6-7 percent in the medium term.
Off with OTT, on with tax on data
As the new financial year kicks off, the infamous Over-The-Top (OTT) is no more but replaced by a 12% excise duty on data; one would be forgiven to wonder which one is better
Since 2018, The Government Has Levied A Shs200 Daily OTT Tax On Services Such As Facebook, Twitter, And Whatsapp Among Others.
But In The New Budget For 2021/2022, The Ministry Of Finance Slapped A Harmonized Excise Duty Rate Of 12% On Airtime, Value-Added Services And Internet Data As Substitute For OTT.
The Tax On Internet Bundles Is One Of The Seven New Taxes That The Government Applied From July 1, At The Start Of The Next Financial Year.
Govt earmarks Shs370b for Covid-19 response
The government on Tuesday announced that they have allocated Shs373 billion towards fighting the second wave of Covid-19 in the country.
Finance minister Matia Kasaija said they have suspended some activities in the upcoming financial year 2021/2022 Budget to cater for Covid-19 response.
“We are not going to borrow this money. We are going to suppress some activities that are not so important right now. People should learn to do things virtually,” he said on Tuesday, June 29, 2021.
Mr Kasaija said government had planned to allocate Shs600 billion towards Covid-19 response but they are only able to get Shs373 billion.
Mr Kasaija said the balance of Shs227 billion will be obtained at a later date. According to the allocations, the Health ministry has been allocated Shs206.4 billion, Security (Shs50b) and Local Government (Shs8.1b).
Security Minister Jim Muhwezi said their budget is slated to facilitate the army, police, prisons, Resident District Commissioners (RDCs), Immigration and Security services to enforce the Standard Operating Procedures (SOPs).
COVID-19: 109 Uganda companies certified to produce sanitizers, 57 to make face masks
The Uganda National Bureau of Standards (UNBS), whichismandated to ensure quality and safety of different products on the market, has certified 109companies to produce 127 brands of sanitizers and disinfectants.
The agency on Tuesday also released a list of 57 companies it says are certified to manufacture non-medical face masks as the country battles the second wave of Covid-19.
UNBS says all this is to ensure quality and reliable products as the country battles the second wave of Covid-19.
Eight labour export firms lose licences over human rights abuses
Eight labour export companies saw their operational licenses suspended or terminated over numerous cases that lead to human rights abuse.
According to an official from the Internal Affairs Ministry, said that the affected companies were involved in forgery, human trafficking while for others, there complaints of human rights abuses.
Labour recruitment firms are regulated and monitored by the Uganda Association of External Recruitment Agencies (UAERA) together with the Ministry of Gender, Labour and Social Development, which is the regulating body that ensures every company is licensed to externalize labour.