Prime Minister Robinah Nabbanja (M) arrives at the Conference on Tax Incentives, Tax Policies, and Tax Administration for Ugandan Investors at Hotel Africana, where she is greeted by Minister of State for Investment and Privatization Evelyn Anite, State Minister for Finance Henry Musasizi, and Permanent Secretary Ramathan Ggoobi
KAMPALA—Uganda’s government has vowed to revamp tax incentives, creating a more favorable business climate for local investors.
Speaking at the Conference on Tax Incentives, Tax Policies, and Tax Administration for Ugandan Investors on September 4, 2024, at Hotel Africana, Prime Minister Robinah Nabbanja assured over 500 investors of the government’s dedication to refining tax policies that spur economic growth and development.
Nabbanja emphasized the need for targeted and effective tax incentives to boost key sectors like manufacturing, agriculture, and technology. “Our aim is to ensure that tax incentives are effective in attracting investment, transparent, and provide value for money,” she said.
The Prime Minister acknowledged the vital role local investors play in Uganda’s economic development, highlighting their contributions to job creation, industrialization, and reducing reliance on imports. The government’s promise to streamline tax incentives comes in response to concerns about the current tax framework’s complexity and perceived imbalance.
Nabbanja noted the need to continuously review and refine the tax incentive framework to maximize its impact while safeguarding the country’s revenue base. “We must protect our revenue base, as over-reliance on tax incentives can lead to revenue losses that could affect our ability to finance critical public services,” she added.
Permanent Secretary Ramathan Ggoobi echoed Nabbanja’s sentiments, stressing the importance of a balanced approach to tax incentives. Ggoobi highlighted the government’s successful efforts to enhance domestic revenue mobilization, with the revenue-to-GDP ratio improving from 8.9% in 2000/01 to 14.3% in the current financial year.
“Our tax policies aim to ensure fairness, equity, and simplicity, not just revenue collection,” Ggoobi said. He noted that tax incentives have significantly contributed to the growth of industry and agriculture sectors, crucial to Uganda’s economic recovery.
Minister Evelyn Anite emphasized the importance of government-private sector collaboration in developing tax policies that address real challenges faced by investors. She dispelled the misconception that tax holidays only benefit foreign investors, emphasizing that local investors also qualify for these incentives.
“We are committed to creating a level playing field where both local and foreign investors can thrive,” Anite said.
Local investors raised concerns about fines and penalties imposed by government agencies, which some perceive as overly punitive. Deo Kayemba, Chairman of the Uganda Manufacturers Association, called for more focus on education and sensitization rather than penalties.
“There should be a greater emphasis on supporting businesses to comply with tax regulations rather than prioritizing revenue from fines,” Kayemba argued.
In response, State Minister Henry Musasizi assured investors that the government is reviewing existing tax incentives to ensure they are strategically focused and aligned with national development goals.
“We are looking at ways to make the tax system more conducive to business growth while ensuring fairness and inclusivity,” Musasizi stated. He emphasized the government’s commitment to addressing both formal and informal sectors to ensure comprehensive tax compliance.
The conference concluded with a commitment from the government to work closely with local investors in refining tax policies, aiming to develop a streamlined tax system that supports sustainable economic growth, encourages investment, and ensures Uganda remains an attractive business destination.
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