Budget winners and losers
Jun 12, 2009
DESPITE presenting a rather conservative budget, Finance minister Syda Bbumba created both winners and loses the moment she climbed the podium last Thursday.
By Conan Businge
DESPITE presenting a rather conservative budget, Finance minister Syda Bbumba created both winners and loses the moment she climbed the podium last Thursday.
Agriculture
The biggest winners are farmers. Over 600,000 heads of cattle will be vaccinated against foot and mouth disease free of charge. Outbreaks have been reported in almost all parts of the country in the last two years. This crisis affected everyone who depended on the livestock industry.
Transporters have in the past had to use the demarcated routes, which doubling their expenses. By the end of 2006, the traders were hit hardest. The cost of transporting cattle from the western region to Kampala rose from sh20,000 per animal before the quarantine to sh60,000.
The reduced beef supply and pushed the price of beef up from sh2,200 to sh4,000. Without enough beef to meet local demand, meat processing firms such as Uganda Meat Industries are suspending beef exports.
About 500,000 heads of cattle will also be vaccinated against lumpy skin disease. More 20 million doses for vaccination against Newcastle disease in poultry, in addition to 25 new varieties of resistant crop varieties, will be distributed.
The disease causes 80% of deaths to local breed chicken in Uganda. It has no cure, and the only way to protect poultry is to vaccinate them.
Farmers have also been promised bulk water facilities and other input support on their farms. In addition to that, more sh30b is on table for credit facilities. Government will look for, and already has some loan grants for farmers totalling to sh374b from international banks.
There is more money for the NAADS programme. Having made farmers a top priority in this budget, the Uganda Debt Network boss Prof. Edward Kakonge, says this move will “absorb a lot of unemployed people and stimulate the economy.â€
Heat insulated milk tanks for the diary industry will be duty exempt. This is timely, since more milk, is annually being produced in the country. The Ugandan dairy sector is developing rapidly over recent years, and is dominated by small-scale farmers owning more than 90% of the national cattle population.
Education
The budget did not specifically say anything about the mushrooming enrolment in higher institutions of learning. There are about 100,000 students in the country’s private and public institutions. That is without mentioning other tertiary institutions.
It is only people under the free secondary education umbrella, who have a reason to smile. There is nothing special for universities this time but they can always find their share of the cake in the ministry budget.
Secondary education will have new seed schools constructed, and free education will stream to senior four. Government has also secured $80m and more $150m from the African Bank and World Bank, respectively, for the continuation of the school construction programme and provision of construction materials.
For primary schools, save for the five houses which will be constructed per district, they may have to wait for the coming financial year, to have their share.
Teachers all over the country are still faced with the problem of inadequate housing. The latest figures from the education ministry show that there are only 1,664 houses for all 144,220 primary school teachers.
By 2002, the demand for teachers’ houses was over 88,461. Seven years later, there has been a quick rise of the number of teachers all over the country, implying there is need for more teachers’ houses.
The scrapping of income tax on new educational institutions means schools can now use the money saved to improve the quality of their services. Overcrowded classrooms should be a thing of the past. It is time schools restocked their laboratories, since construction materials for schools are duty free.
Dealers in used electronic items
For the sake of protecting the environment, the Government has banned the importation of used computers, freezers and refrigerators. Men and women in this business may have to quickly change their stock, if they are to remain in the trading business.
But how many people can afford new items? Won’t we have a problem of people over-repairing their old appliances because they can’t afford new ones? Soon, if you cannot pay a for new fridge, you will have to live without it.
Transporters
The East African minister of finance agreed to grant remission of import duty from 25% to10% for trucks of 5 tonnes and above for one year for Uganda Tanzania and Rwanda.
Trucks with a loading capacity of over 20 tonnes have been granted remission from import duty from 25%. Those in Uganda, Tanzania and Rwanda will pay no single coin on imports.
The several roads marked for improvement in the coming financial year will greatly reduce make it cheaper and faster to transport goods.
War-torn areas
Rwenzori region, Luwero Triangle and Northern Uganda, will get special programmes to help them develop and consolidate the peace attained.
The Government will send sh10b to Luweero and Rwenzori people. Northern Uganda will get sh1.1 trillion as Peace Recovery and Development Plan funds.
Manufacturers
Manufactures have a reason to smile also. Excise duty on beer produced, grown and malted in Uganda was reduced from 60 to 40%. The Government is promoting the growth of sorghum in Eastern, and Western parts of the country.
This will reduce on the costs of production of beer and give farmer reasons to celebrate.
Industries, importing machines to replace worn out ones in their factories, will have remissions.
Machinery spares and inputs for direct use in oil, gas, and geothermal exploration will have remissions on being imported.
Filming industry
There will be remissions on the import duty of filming equipment. People in the media can easily have their companies growing, especially in the credit crunch time. This may increase employment.
Polythene bags manufacturers and users
The high tax on polythene bags will stimulate the cottage packaging industries. Those producing paper packaging materials, can as well shoot up their production, because polythene bags were given six months’ grace period to stop.
But Issa Ssekito the Kampala traders’ publicist says this is unrealistic. It is just a political statement, he said. He thinks 120% excise duty imposed on buvera manufacturers will be difficult to implement. He calls it a gamble on a policy.
We have 34 factories manufacturing plastic materials and in spite of earlier warnings, they have not been closed.
Housing sector
The 5% slash on value added tax (VAT) on house sales mean more people can afford buying own homes.
But, there is no reduction of costs on the construction materials whose prices are shooting up, daily. However the sector will benefit from more construction of schools, hotels and health units, whose import tax on construction materials has been eased. More 6,200 new classrooms and other 1,900 half-built classrooms will be completed in the new financial year. This is in addition to more teachers houses.
Public servants
Public servants got a 5% increase on their salaries but this is no reason to smile because by May, the inflation rate stood at over 12%.
Tax evaders
It is going to be a real hard year for tax evaders. As Ssekito puts it, the budget is telling us to tighten our belts. It is going to be tough year, when it comes to collection of taxes.
The budget has proposed no new taxes but the expenditure for some sectors is still high, implying government has to use all alternatives to get money. It may not be an easy year for tax evaders.
Importers
The dollar rate has gone up by 34.7% and it is becoming more expensive especially for importers. Now the Government is leaving the market to determine the exchange rate and will only intervene to maintain stability means where possible.
DESPITE presenting a rather conservative budget, Finance minister Syda Bbumba created both winners and loses the moment she climbed the podium last Thursday.
Agriculture
The biggest winners are farmers. Over 600,000 heads of cattle will be vaccinated against foot and mouth disease free of charge. Outbreaks have been reported in almost all parts of the country in the last two years. This crisis affected everyone who depended on the livestock industry.
Transporters have in the past had to use the demarcated routes, which doubling their expenses. By the end of 2006, the traders were hit hardest. The cost of transporting cattle from the western region to Kampala rose from sh20,000 per animal before the quarantine to sh60,000.
The reduced beef supply and pushed the price of beef up from sh2,200 to sh4,000. Without enough beef to meet local demand, meat processing firms such as Uganda Meat Industries are suspending beef exports.
About 500,000 heads of cattle will also be vaccinated against lumpy skin disease. More 20 million doses for vaccination against Newcastle disease in poultry, in addition to 25 new varieties of resistant crop varieties, will be distributed.
The disease causes 80% of deaths to local breed chicken in Uganda. It has no cure, and the only way to protect poultry is to vaccinate them.
Farmers have also been promised bulk water facilities and other input support on their farms. In addition to that, more sh30b is on table for credit facilities. Government will look for, and already has some loan grants for farmers totalling to sh374b from international banks.
There is more money for the NAADS programme. Having made farmers a top priority in this budget, the Uganda Debt Network boss Prof. Edward Kakonge, says this move will “absorb a lot of unemployed people and stimulate the economy.â€
Heat insulated milk tanks for the diary industry will be duty exempt. This is timely, since more milk, is annually being produced in the country. The Ugandan dairy sector is developing rapidly over recent years, and is dominated by small-scale farmers owning more than 90% of the national cattle population.
Education
The budget did not specifically say anything about the mushrooming enrolment in higher institutions of learning. There are about 100,000 students in the country’s private and public institutions. That is without mentioning other tertiary institutions.
It is only people under the free secondary education umbrella, who have a reason to smile. There is nothing special for universities this time but they can always find their share of the cake in the ministry budget.
Secondary education will have new seed schools constructed, and free education will stream to senior four. Government has also secured $80m and more $150m from the African Bank and World Bank, respectively, for the continuation of the school construction programme and provision of construction materials.
For primary schools, save for the five houses which will be constructed per district, they may have to wait for the coming financial year, to have their share.
Teachers all over the country are still faced with the problem of inadequate housing. The latest figures from the education ministry show that there are only 1,664 houses for all 144,220 primary school teachers.
By 2002, the demand for teachers’ houses was over 88,461. Seven years later, there has been a quick rise of the number of teachers all over the country, implying there is need for more teachers’ houses.
The scrapping of income tax on new educational institutions means schools can now use the money saved to improve the quality of their services. Overcrowded classrooms should be a thing of the past. It is time schools restocked their laboratories, since construction materials for schools are duty free.
Dealers in used electronic items
For the sake of protecting the environment, the Government has banned the importation of used computers, freezers and refrigerators. Men and women in this business may have to quickly change their stock, if they are to remain in the trading business.
But how many people can afford new items? Won’t we have a problem of people over-repairing their old appliances because they can’t afford new ones? Soon, if you cannot pay a for new fridge, you will have to live without it.
Transporters
The East African minister of finance agreed to grant remission of import duty from 25% to10% for trucks of 5 tonnes and above for one year for Uganda Tanzania and Rwanda.
Trucks with a loading capacity of over 20 tonnes have been granted remission from import duty from 25%. Those in Uganda, Tanzania and Rwanda will pay no single coin on imports.
The several roads marked for improvement in the coming financial year will greatly reduce make it cheaper and faster to transport goods.
War-torn areas
Rwenzori region, Luwero Triangle and Northern Uganda, will get special programmes to help them develop and consolidate the peace attained.
The Government will send sh10b to Luweero and Rwenzori people. Northern Uganda will get sh1.1 trillion as Peace Recovery and Development Plan funds.
Manufacturers
Manufactures have a reason to smile also. Excise duty on beer produced, grown and malted in Uganda was reduced from 60 to 40%. The Government is promoting the growth of sorghum in Eastern, and Western parts of the country.
This will reduce on the costs of production of beer and give farmer reasons to celebrate.
Industries, importing machines to replace worn out ones in their factories, will have remissions.
Machinery spares and inputs for direct use in oil, gas, and geothermal exploration will have remissions on being imported.
Filming industry
There will be remissions on the import duty of filming equipment. People in the media can easily have their companies growing, especially in the credit crunch time. This may increase employment.
Polythene bags manufacturers and users
The high tax on polythene bags will stimulate the cottage packaging industries. Those producing paper packaging materials, can as well shoot up their production, because polythene bags were given six months’ grace period to stop.
But Issa Ssekito the Kampala traders’ publicist says this is unrealistic. It is just a political statement, he said. He thinks 120% excise duty imposed on buvera manufacturers will be difficult to implement. He calls it a gamble on a policy.
We have 34 factories manufacturing plastic materials and in spite of earlier warnings, they have not been closed.
Housing sector
The 5% slash on value added tax (VAT) on house sales mean more people can afford buying own homes.
But, there is no reduction of costs on the construction materials whose prices are shooting up, daily. However the sector will benefit from more construction of schools, hotels and health units, whose import tax on construction materials has been eased. More 6,200 new classrooms and other 1,900 half-built classrooms will be completed in the new financial year. This is in addition to more teachers houses.
Public servants
Public servants got a 5% increase on their salaries but this is no reason to smile because by May, the inflation rate stood at over 12%.
Tax evaders
It is going to be a real hard year for tax evaders. As Ssekito puts it, the budget is telling us to tighten our belts. It is going to be tough year, when it comes to collection of taxes.
The budget has proposed no new taxes but the expenditure for some sectors is still high, implying government has to use all alternatives to get money. It may not be an easy year for tax evaders.
Importers
The dollar rate has gone up by 34.7% and it is becoming more expensive especially for importers. Now the Government is leaving the market to determine the exchange rate and will only intervene to maintain stability means where possible.