By Spy Uganda
The Ministry of Finance has proposed to government to
work out a way of bailing out private business ventures in Uganda that have
been negatively impacted by the Coronavirus (COVID-19) lockdown and its
consequent effects on the economy.
President Yoweri Museveni revealed on Thursday during his State of the Nation Address that the Ministry of Finance, Planning and Economic Development is proposing the following measures, to provide liquidity to private firms that have been affected by the COVI-19 Lockdown.
The proposals were highlighted in President Museveni’s State of Nation Address which he read yesterday to parliament via zoom and they include:
(i) Allow
corporations including small and medium sized enterprises (SMEs) to delay
payment of corporation tax or presumptive tax for taxes due between April and
June 2020 and for tourism, manufacturing, horticulture and floriculture to
defer until September 2020;
(ii) Defer
payment of Pay-As-You Earn (PAYE) tax by those sectors which are most affected
until September 2020;
(iii) Waiver of
interest on tax arrears;
(iv) Support to
water and electricity utilities in order to ensure continued supply of these
essential services to consumers during the period April to June 2020;
(v) Expedite
payment of outstanding VAT refunds;
(vi) Payment of
domestic arrears for goods and services supplied to Government by the private
sector;
(vii) For
those unable to pay their loans, Government through the Bank of Uganda has
already put in the gazette the measures to support businesses; including
allowing extension of repayment periods, postponement of loan repayment for a
limited period, relaxing the conditions for non-performing loans, reduction of
reserve funds commercial banks are required to keep with Bank of Uganda and
creating a special liquidity facility to rescue businesses that are not able to
meet operational costs due to low demand or reduced production due to COVID-19;
(iii) Capitalisation
of Uganda Development Corporation (UDC) with Ug Shs. 100 billion to enable
Government to invest in strategic areas;
(ix) Boosting funding
to Uganda Industrial Research Institute (UIRI) in FY 2020/21 to continue with
innovation research and incubation of business start-ups.
(x) Securing funding for the development of Kampala
Industrial Business Park at Namanve and for power transmission and substations
for Mbale, Kapeeka, Bweyogerere, Kasese, Soroti, Luzira, Jinja and Mbarara
industrial parks; and
(xi) Provision of
additional UGX 300 billion immediately to boost agricultural production and
productivity for seedlings, fertilizers, irrigation, storage facilities and
value addition. The target crops are coffee, cotton, tea, palm oil and other
oil seeds, cassava, maize, cocoa and dairy, beef, and fish production.
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