President Yoweri Museveni delivered the fifth and last State of the Nation Address (SONA) of the 10th Parliament on 4th June on a wide range of topics including the COVID-19 pandemic and proposals for an economic stimulus package to support economic recovery.

 

The Minister of Finance, Planning and Economic Development on the 11th June during the reading of the National Budget for FY 2020/2021 reiterated the proposals made by the President during the SONA on concrete measures to provide liquidity to private firms that have been affected by the COVID-19 lockdown.

Here is what you need to know:

  • Corporations including small and medium sized enterprises (SMEs) may delay payment of corporate tax or presumptive tax for taxes due between April and June 2020 and for tourism, manufacturing, horticulture, and floriculture until September 2020;
  • Pay-As-You Earn (PAYE) tax may also be deferred by those sectors most affected until September 2020;
  • Interest on tax arrears has been waived;
  • The government will provide support to water and electricity utilities in order to ensure continued supply of these essential services to consumers during the period of April to June 2020;
  • Government will expedite payment of outstanding VAT refunds;
  • Government will make payments on domestic arrears for goods supplied to the government by the private sector;
  • Through the Bank of Uganda, a special liquidity facility to rescue businesses not able to meet operational costs due to low demand or reduced production due to COVID-19 will be created.
  • To ensure that imported goods meet the required health and safety standards, the government has rolled out the use of digital tax stamps in order to reduce importation fraud, under-declaration and to ease customs handling.
  • The government has smoothened volatility in the foreign exchange market arising from global financial markets by injecting more foreign reserves into the Central Bank.

Specific information will be forthcoming related to the implementation of these measures.

Other measures announced include:

  • Capitalization of Uganda Development Corporation with Ug shs 100 billion to enable the government to invest in strategic areas;
  • Boosting funding of Uganda Industrial Research Institute (UIRI) in FY 2020/21 to continue with innovation, research, and incubation of business start-ups;
  • 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
  • Providing additional Ug shs 300 billion immediately to boost agricultural production and productivity for seedlings, fertilizers, irrigation, storage facilities and value addition.

Other useful announcements by the President include:

  • Government will not allow landlords to evict tenants on account of not paying rent, although discussions remain underway on this topic; and
  • Food distribution to vulnerable people will continue until the end of the pandemic.

REFERENCE:

  • National budget frame work paper FY 2020-21-0(1)
  • State of the nation address 04th June 2020 by the President of Uganda HE YK.Museveni.
  • National Budget speech FY 2020-21 on 11th June 2020 by Minister of Finance ,Hon Matia Kasaijja