BY SAMUEL NABWIISO
KAMPALA, Uganda–African Development Bank is to extend loan totaling to $20milion to Uganda for capitalizing Uganda Development Bank.
The loan which is to be the approved within a period of three months will be used to extend cheap loans to Uganda’s, Business Community operating in the value chain of the agriculture sector.
The deputy Secretary to the Treasury Patrick Ocailap disclosed the development during the Uganda Revenue Authority Post Budget Breakfast meeting at Hotel Africana in Kampala.
“We are in the final stages to secure the loan from the African Development Bank to capitalize UDB; we hope that once the money is secured, it will help our local business people access cheap loans from government instead of over depending on expensive loans offered by commercial banks” Ocailap told the Business Community at the breakfast meeting.
He said the government of Uganda will be injecting Ushs60 billion to the Bank which he said, if it’s well capitalized; it can support the development of the private sector.
Ocailap revelation was in response to queries raised by the business people who blamed government for its failure to enable the business Community have access to cheap loans. They said although government in the coming financial year 2018/2019 is coming up with tax regimes which can support the development of the private sector in the country, such regimes will not help if the interest rates charged by the commercial banks are still very high.
Apart from the African Development Bank loan , Ocailap also advised the private sector to consider sourcing loans from the secondary markets because majority of the commercial banks are preferring to buy government bonds which are more secure than financing businesses under the private sector.
A secondary market is a market where previously issued securities, such as stocks and bonds, are traded among investors. Secondary markets provide the liquidity for investors and even for the economy as a whole. In general the, higher the number of investors; the greater the liquidity for the market.
During the meeting, participants raised many issues which they said are affecting revenue Mobilization in the country some of which included; unfair tax holidays which government extends to foreign multinational companies, unfair taxation policies, corruption among key government agencies and failure by government agencies to offer quality services.
James Okello a trader at Nakasero, said if URA is to collect more revenue domestically, government should ensure that there’s value for money especially in the social and services sectors such as education, health, water among others sectors.
“When you look at the quality of our education especially at the pre-primary and post primary, it is wanting, if government want us to pay tax, we need to see the money being allocated to sectors that can transform the younger generation,” He said.
In response the commissioner General of URA Doris Akol said Ugandans need to embrace paying tax because the government needs money to finance key projects and programs.
“As URA, our mandate is to collect revenue on behalf of government. The general public should caution those agencies that they consider are not offering them quality services,“ She said.
The breakfast meeting was organized under theme “Benefit from Your Budgets rhymes with the National theme of Industrialization for job Creation and Shared prosperity “ URA breakfast meeting was held simultaneously in five places country wide namely Kampala, Jinja , Masaka ,Arua , Fortportal.
The objective of the meeting was aimed at interpreting and understanding the benefits of the previous budgets and its implications to the 2018/2019 financial year Budget. It also provided an opportunity to discus and understand the new policy amendments for better Implementation.