About 50 local investors yesterday decried what they called the increasingly unfavourable tax environment and costly loans, which they said are kicking them out of business.
During a stakeholders’ engagement meeting that was hosted by the head of the State House Investor Protection Unit, Col Edith Nakalema, at her office in Kampala yesterday, the investors accused the Uganda Revenue Authority (URA) and Bank of Uganda of being at the epicentre of their suffering and early deaths of their businesses.
The chairperson of the Kampala City Traders Association (Kacita), Mr Thaddeus Musoke, said majority of Ugandan businesses are struggling to access finance from commercial banks, which are offering it at high interest rates ranging between 18 percent and 23 percent.
“I have personally processed a loan for nine months. To make matters worse, I have invested Shs15 million to chase a loan of Shs500 million, of which the bank is giving me only Shs300 million,” he said.
The consistent squeezing of taxes from a small fraction of Ugandans by the URA, he said, has increasingly led to the collapse of local investments.
Relatedly, Mr John Walugembe, the chairperson of the Federation for Small and Medium Enterprises, said the continuous suffocation of small businesses by the government has kicked many of their members out of business.
Col Nakalema informed stakeholders that she called for the meeting following a public outcry from local investors who, in multiple petitions, informed her that the government bodies, which should ideally help them grow, were instead suffocating their businesses.
“And since my office is mandated to ensure investors have a smooth working condition, that’s why I had to summon all of you and government officials responsible for the offices you were complaining about,” she said.
She added that the majority of investors have complained about the stringent measures put in place by commercial banks that have barred them from accessing the Agriculture Credit Facility (ACF) and the Small Businesses Recovery Funds, which were rolled out by Bank of Uganda to help local investors.
Officials from the government, who attended the meeting, assured the angry investors that the government is and will do whatever it takes to ensure the investment climate is smoothened.
Mr John Musinguzi, the Commissioner General of URA, Mr Moses Kaggwa, the acting Director of Economic Affairs at the Ministry of Finance, Planning and Economic Development, Mr Richard Byarugaba, the Executive Director in-charge of Finance at Bank of Uganda, officials from the Uganda Registration Services Bureau, and Uganda National Bureau of Standards, among others, said the government acknowledges the importance in the development of this country.
The National Coordinator of Uganda Millers Association, Mr Jacob Kabondo, accused all the institutions of deliberately failing them from the local to regional level and at the same time charging them exorbitant taxes.
“Our industry is bleeding, we are suffering and yet these people are asking for taxes. We used to export three containers a week, now it takes three weeks to export one container,” he said.
Other stakeholders from millers, fish industry, e-trade, and Uganda women entrepreneurs, among others, also raised numerous concerns.
In response to these cries, Mr Musinguzi said the tax body will conduct a number of reforms aimed at solving the investors’ grievances.
Mr Byarugaba acknowledged the fact that the uptake of Small Business Recovery Fund was too low where only Shs8 billion of the Shs200 billion that had been availed in 2021, was consumed.
“We understand the commercial banks are not giving people who need this money when they apply and this challenge is being addressed,” he said.
In a rejoinder, Mr Kaggwa said they are holding a meeting early this month where the government will assess the impact and success of all its livelihood programmes and see where to add more emphasis.