This archive report was first published on 24 August 2021.
Published on August 24, 2021, as the Ugandan economy grapples with the effects of the COVID-19 pandemic, the business community is urging the government to reduce taxes on raw materials and harmonize digital tax stamp rates with its East African Community partners, Kenya, Tanzania, and Rwanda.
According to the Ministry of Finance, the formal sector workforce in Uganda declined significantly in June 2021, with 60,982 workers losing their jobs. This mirrors the uncertainty surrounding the country's economic outlook, with the total number of formal jobs decreasing from 714,048 in May to 653,066 in June.
Chairman of the Federation of Small and Medium Enterprises Uganda, Daniel Musiitwa Ssubi, emphasized the devastating impact of the pandemic on SMEs, citing quarantine and lockdown measures that led to decreased demand, supply chain disruptions, raw material shortages, transportation challenges, and cash flow disruptions.
“The quarantine and lockdown measures imposed by the government in March 18, 2020, and June 18, 2021, led to a decrease in demand and caused supply chain disruptions, raw material shortages, transportation challenges and cash flow disruptions,” said Mr. Ssubi.
The Bank of Uganda Governor, Tumusiime-Mutebile, projects a sluggish economic growth of 3.5 percent to four percent in the 2021/2022 financial year, attributing this to the effects of COVID-19 measures. Private business owners are now calling on the government to revise its revenue ambitions and policies to improve the competitiveness of Ugandan goods in the region.
