 Finance Minister Matia Kasaija: World Bank faults Uganda over low loan absorption Development partners are concerned about the delayed utilization of money borrowed, says finance minister Matia Kasaija. The World Bank has raised concern over the Ugandan government's low absorption rate of loans.Talking about the negotiations he had with the World Bank, finance minister Matia Kasaija said that the development partners are greatly concerned about the delayed utilization of money borrowed.“Their biggest concern is low absorption for loans," he said when asked. The Word Bank suspended support to Uganda and this has put the implementation of the country’s budget at stake since World Bank is one of the major sources of funds for the country’s budget.In a cabinet meeting, Prime Minister Dr. Ruhakana Rugunda said Uganda has in the last seven years lost about sh92b due to delayed utilization of borrowed money.Read more ▪ Finance minister Matia Kasaija: Businesspeople promoting corruption, Kasaja Finance minister Matia Kasaija has accused the business community of promoting corruption saying they prefer giving kickbacks to dodge right processes. Mr Kasaija, who was speaking as chief guest at a high level dialogue on the role of private sector in the delivery of sustainable development goals (SDGs) in Kampala, said most businesspeople bribe officials to secure contracts or to avoid taxes.“I know there is what we call commission in business. It is given after a deal has been done like a handshake. But this business of do this for me I will give you this has stalled the fight against corruption. You business people like evading processes and taxes,” he said.Mr Kasaija was responding to Mr Patrick Bitature, the chairman Private Sector Foundation Uganda, who in his speech castigated government for failure to fight corruption.Governments are expected to achieve SDGs by 2030 which include zero hunger, good health and wellbeing, quality education, gender equality, decent work and economic growth and institutions.Mr Kasaija, Mr Bitature and other stakeholders agreed that the goals are achievable if there is social, political and economic will of every citizen, especially in the fight against corruption.The minister urged the business community to help the government in the fight against unemployment through continued investment, warning that unemployment, if not addressed, may soon cause mayhem in the country. Read more ▪ MOF,Matia Kasaija: Parliament rejects govt plan to raise property tax Kampala. Lawmakers have rejected a government proposal to increase stump duty also known as property tax from 1 per cent to 2 per cent, a measure Finance minister Matia Kasaija said was projected to contribute Shs9 billion to the Budget. Instead of the proposed 2 per cent, the Finance Committee cut it to 1.5 per cent. However, this was rejected by parliamentarians who argued that such a measure would affect the country’s Growth Domestic Product (GDP), reduce consumption and hit tax collections in the process. Parliament started debate on the revenue measures for the Budget. Paul Mwiru (Jinja Municipality East), Nandala Mafabi (Budadiri West) and Wilfred Niwagaba (Ndorwa West) and Theodore Ssekikubo (Lwemiyaga) also warned that increasing property tax charged on the transfer/sale of property such as land, buildings and vehicles and others will cause problems in the economy and worsen corruption. Read more ▪ Finance minister Matia Kasaija: Experts speak out on alternative tax avenues Much as Uganda Revenue Authority (URA) is already penetrating the informal sector, more needs to be done. proposed a raft of taxes to be collected in the National Budget. Mr Kasaija proposed to increase taxes on all types of cigarettes, ready-to-drink spirits, cement, motor spirit (gasoline), gas oil (automotive, light, amber for high speed engine), cane or beet sugar and chemically pure sucrose in solid form, motor vehicle lubricants, confectioneries (chewing gum, sweets and chocolates).He also proposed to increase the rate of the environmental levy imposed on used clothing and used shoes among others.More taxes will be imposed on the importation of un-denatured alcohol, lubricants, steel and steel products, electronics, including fridges, washing machines, radios, DVD players and television sets, paper and paper products and diapers. According to the minister, all those increases are minimal. However, some tax experts and seasoned observers say URA must reach the likes of Mugagga, Mugyenzi and all those outside the taxman’s radar of not paying their fair share of taxes. Read more ▪ MOF: Government wants Finance management Act revised After President Museveni signed it into law, ministry of Finance wants Parliament to let them amend the Public Finance Management Act.The Act is seen as a strong law with sections providing for checks and balances, empowering Parliament to have a key oversight role as well as a gender and equity clause.A copy of the proposed amendments seen by Daily Monitor indicates that Finance ministry wants to amend eight clauses which analysts say are the core of the Act, and removing them will render the law less effective to serve its purpose.In its current form, the Act ensures proper management of public funds as it dictates public spending based on the priorities in the Budget.But the Finance ministry wants to amend Section 9, by substituting the word ‘Accounting Officer’ with ‘Sector’ and ‘vote’ with ‘sector’. Read more ▪ MOF: Govt unveils new reforms The public and financial sector have welcomed the Cabinet approval of the Financial Institutions (Amendment) Bill.The Bill to be tabled before Parliament soon paves way for the introduction of Islamic and Agent banking as well as bancasurance in Uganda.Also included in the reforms is the creation of a fully-fledged fund to compensate customers when their bank is closed. This will protect the savings of Ugandans and will ensure compensation higher than the guaranteed sh3m if a bank closes.The fund will be able to invest the money meant to protect customers of banks and micro-finance institutions.The ‘protected deposit’ shall be adjusted regularly by the finance minister, according to the Bill gazetted. Read more ▪ MOF: Uganda gets Shs40 billion for rural electrification Ministry of Finance and the German Development Cooperation have signed a Euro 10 million (about Shs40b) grant meant to finance electrification programme for rural communities.The grant was signed in Kampala by State minister for Finance David Bahati, and director for East Africa KfW Development Bank Klaus Mueller during the visit of German Chancellor’s personal representative for Africa Gunter Nooke in Uganda. Speaking to Daily Monitor in Kampala, Dr Mueller said this is the second contract they have signed to increase connectivity of electricity to Uganda. “This grant will go towards increasing connectivity of communities in Uganda. We focused on generation but we realised there was need to increase access of communities to electricity,” he said.According to a statement released by the German embassy in Kampala, the new grant will finance a programme to electrify rural communities of the country. Read more ▪ MOF: Govt exempts VAT on oil production The government has granted Value Added Tax exemption for companies involved in the production of oil and minerals. There had been mumbling by all players in the oil and gas sector regarding the 18 per cent VAT charge on capital equipment used in prospecting and production of oil and minerals. In the VAT Amendment Bill, tabled in Parliament by finance minister Matia Kasaijja, it grants the oil and mining companies this exemption. Mr Kasaijja notes that the amendment is “to provide for tax treatment of the oil and gas and mining sectors.” “The tax payable on a taxable supply made by a contractor to a licensee to undertake mining or petroleum operations is deemed to have been paid by the licensee to the contractor provided the supply is for use by the licensee solely and exclusively for mining or petroleum operations, as the case may be,” the proposed amendment reads. Read more ▪ MOF: Government cautioned against proposal to raise taxes on fuel Consumers should tighten their belts for they are going to dig deep into their pockets as government looks to increase fuel prices in the coming Budget.This follows Finance minister Matia Kasaija’s proposal to introduce new taxes on fuel to finance the country’s Shs18.3 trillion Budget.The minister in the Finance Bills seen by Daily Monitor wants excise duty of Shs1,000 charged on every litre of fuel (gasoline); gas oil (automotive, light, amber for high speed engine) will be charged Shs680 per litre.Because of this action, players in the market are saying the consumer will have to bear the wrath of increased prices.Giving his views on the Finance Minister’s proposal in an interview with Daily Monitor Vivo Energy Uganda’s chief executive officer Hans Paulsen. Read more ▪ |