Uganda’s GDP to grow to UGX138Trn in forthcoming financial year – Finance Minister

From Agencies,

 Finance Minister Matia Kasaija says that Uganda’s GDP is expected to grow to UGX138 trillion in the forthcoming financial year.

The 2020/21 national budget is based on the theme: Stimulating the economy to safeguard livelihoods, jobs, business and industrial recovery.

He reports that the economy grew by 3.1% in the 2019/20 financial year, which was slower than the 5.4% in the previous years.

Meanwhile, the minister strikes a tone of optimism when he reports that agriculture grew by 4.2% in the financial year ending June 30 while the services sector grew by 3.6%.

On transport, he talks of the increase in the paved road network to 5,000km up from 4,000km in the previous year. In ICT, he indicates that Internet users have increased from 7.5 million last year to 11 million in March 2020.

The minister says that one of the strategies by Government in the forthcoming financial year is to ensure food security and good nutrition. The minister says that the coronavirus has brought to fore the need to ensure adequate food security and nutrition.

Part of the plan is to sensitize Ugandans on the benefits of good nutrition.

Tax relief for businesses

To address the short term emergency liquidity requirements of businesses, boost their cash-flows, and ensure business continuity, the minister proposes the following tax relief measures:

• Defer payment of Corporate Income Tax or Presumptive tax for Corporations and Small, Medium Enterprises (SMEs)

• Defer payment of PAYE by sectors affected

• Waive interest on tax arrears

• Provide for Tax Deductibility of Donations for the Corona Virus Response.

• Expedite Payment of outstanding VAT refunds

Kasaija says which he will present the proposes to Parliament in due course

Education

To enhance the education sector, the Government plans to:

• Roll out the new education curriculum

• Expand access to vocational education

• Improve the quality of tertiary education

• Enhance digital instruction in schools and also provide instruction through the electronic delivery mode (radios, TVs and Internet)

Stabilising the financial sector

The finance minister re-echoes the central bank’s pronouncements on measures being implemented to mitigate risks to overall economic growth, and also ultimately support the financing of businesses.

One of the moves is to provide adequate capital buffers for supervised financial institutions

Enhancing economic infrastructure

Some of the measures include carrying out emergency maintenance of roads and bridges across the country and expediting construction of priority industrial parks and special economic zones.

Minister Kasaija says there are plans to also expand the feeder and national road network, power, as well as ICT infrastructure

Peace, security and good governance

Government plans to continue improving peace and security, the rule of law and good governance.

It plans to do so by promoting peace and security at the community and national level, enhancing effectiveness in public service delivery and increasing access to justice.

Dealing with corruption

So what is in Government’s plan to address the challenge of corruption?

Here are the measures:

Enhance the efficiency and effectiveness of oversight and anti-corruption institutions in identifying areas of risk

Strengthen implementation and follow-up on audit recommendations;

Srengthen implementation of Public Finance Management rules and regulations and the role of Internal Audit

Enhance capacity of the Financial Intelligence Authority and related security agencies to intensify surveillance and gathering of vital information to curb anti-money laundering and terrorism financing.

Revenue target for 2020/21

“Government is developing an Integrated Financing Strategy to guide and monitor how we appropriately raise domestic revenues, and both domestic and external debt financing over the NDP III period,” says Kasaija.

“Domestic revenue measures for next financial year are anchored on the Domestic Revenue Mobilization Strategy (DRMS), which aims to mobilise sufficient revenue to support infrastructure development and social welfare,” he adds.

“Domestic revenue measures for next financial year are anchored on the Domestic Revenue Mobilization Strategy (DRMS), which aims to mobilise sufficient revenue to support infrastructure development and social welfare,” he adds.

The 2020/21 financial year’s revenue target is sh21.810 trillion, comprised of tax revenue amounting to sh20.219 trillion and non-tax revenue of sh1.591 trillion. “This target, the minister says, translates into a revenue effort of 14.3% of GDP”.

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