KAMPALA — Finance Minister Maria Kasaija has presented the 2020/21 budget. His statement is presenting an economic and development context under which the budget was prepared and also underlining the priority actions that support the allocations appropriated by Parliament.
“Madam Speaker, today, we face unprecendeted times [due to the coronavirus pandemic],” starts the minister, who adds that the economy has been significantly hit.
But he underlines that the crises that have hit Uganda cannot derail the country’s long-term strategic plan to lift its economy.
Kasaija says the economic stimulus and growth strategy that the government will implement in the next financial year 2020/2021 include improving the wellbeing of Ugandans, boosting economic transition, and economic governance.
For the education sector, he says the government is to roll out the new education curriculum, expand access to vocational education and training, improve the quality of tertiary education facilities.
He adds that government will enhance teaching supervision using digital platforms, develop the provision of lessons through digital platforms like TV and the internet.
The minister delivering a budget speech happening now, he says interventions will be implemented to increase agricultural production to ensure national food security and expand regional food exports.
He said: “This measure will also sustain the supply of inputs for agro-processing. The restoration of demand for agricultural produce is key to jumpstart this process. Safeguarding Jobs and other non-farm incomes is also critical for the restoration of demand for agricultural products. These actions ultimately ensure the recovery of aggregate demand for domestic products while booting incomes for the majority of households both rural and urban.”
To address the short term emergency liquidity requirements of businesses, boost their cash-flows, and ensure business continuity, he propose the following tax relief measures, which he will in due course present to Parliament:-
“Defer payment of Corporate Income Tax or Presumptive tax for Corporations and Small, Medium Enterprises (SMEs). I am deferring until September 2020, the payment of any Corporate Income Tax and Presumptive Tax due 1st April 2020 to 30th June 2020, for tax complaint businesses with a turnover of less than Shs 500 million per annum. Furthermore, no interest or penalties will accumulate on these amounts during this period. This is aimed to benefit companies and Small or Medium Enterprises (SMEs) especially in tourism, manufacturing, horticulture and floriculture.”
The number of taxpayers benefiting from this measure for whom Corporate Incomes Tax is applicable is 10,140 and the deferred tax is estimated to be Ushs 12.5 billion. In addition, the number of tax payers benefiting from the presumptive tax measure is 23,892, and the deferred tax is estimated to be Ushs 1.38 billion.
Defer payment of PAYE by sectors affected: I am deferring payment until September 2020 of PAYE due from 1st April 2020 to 30th June 2020 for tax compliant Ugandan businesses facing hardships as a result of the COVID-19 pandemic. No interest will accumulate on tax due during this period.”
An estimated UShs 65.35 billion due from Pay As You Earn (PAYE) for manufacturing and tourism sectors is being deferred. For floriculture sector, the expected PAYE deferral is Ushs 0.237 billion”.
“Waive interest on tax arrears: I am waiving interest and penalties on tax arrears accumulated before 1st July 2020 to lessen the tax liability of businesses who voluntarily comply with their tax obligations. The expected tax relief as a result is Ushs 50 billion.
Provide for Tax Deductibility of Donations for the Corona Virus Response. I am allowing the value of the donations the private sector has made towards the Corona Virus Response.
Expedite Payment of outstanding VAT refunds: The Uganda Revenue Authority will speed up payment of outstanding VAT refunds due to businesses accompanied by measures to limit fraud. An additional Ushs 120.53 billion will be refunded.”