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Uganda loses sh725b yearly on business licences

By Vision Reporter

Added 17th September 2015 01:39 PM

Uganda loses sh725.7b annually due to the burden of business licensing and registration explaining why many enterprises fail to register and grow. This amount represents 3.49% of Gross Domestic Product.

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Uganda loses sh725.7b annually due to the burden of business licensing and registration explaining why many enterprises fail to register and grow. This amount represents 3.49% of Gross Domestic Product.

By John Odyek

Uganda loses sh725.7b annually due to the burden of business licensing and registration explaining why many enterprises fail to register and grow. This amount represents 3.49% of Gross Domestic Product.

Dr. Peter K. Ngategize, Coordinator, Medium-Term Competitiveness Strategy, ministry of finance said 57% of this cost constitutes the actual licence fees and 43% is the administrative cost of obtaining these licences. Ngategize said through minimal reforms the burden has been reduced by 26% saving the country sh189b annually.

Ngategize added that Uganda's current ranking in the ease of doing business stands at 150 out of 189 countries. He cautioned that Uganda's ranking would worsen if the pace of reforms in the ease of doing business were slowed down.

Ngategize cited a case where a person seeking to register a business in Kampala will deal with four institutions namely KCCA, URA, URSB and NSSF. This was during a function to demonstrate the e-licensing portal (www.businesslicences.go.ug). The function took place at the Serena Hotel, Kampala.

"This process takes time, costs and money and this explains why most of our enterprises remain informal. These authorities were intended to improve service delivery," he said.

Martha Isabella Achan, legal advisor Competitive and Enterprise Development Project said a committee carried a review of business licenses issued by 44 ministries, departments and agencies and 23 Local Governments (15 Districts and 8 municipalities).

Achan said out of the 790 licenses identified, 56 were recommended for elimination for being redundant and obsolete. She said 285 were recommended to be retained for serving a regulatory purpose.

Another 382 required streamlining to avoid duplication and excessive regulation, 18 are required to be reclassified to have a more simplified process and 49 need to be amalgamated into 20 to stop excessive regulation.

Francis Atoke, solicitor general said as business reforms, laws and policies were being carried, it was important to carry out wide consultations and involve all stakeholders. Atoke said his office was supporting all the legal reform processes.

Dr Frank SSebowa, executive director Uganda Investment Authority proposed that all government bills should be paid electronically to avoid people wasting time in traffic jams to reach banks or offices to pay and some officials demanding for bribes.

James Saka, the executive director of the National Information Technology Authority Uganda said many government institutions were developing IT systems in isolation and the systems might not be able to 'talk' to each other. "Integration of government systems is key in serving people. As laws change technology must change," Saka said.

Bemanya Twebaze, registrar general URSB said one of the reforms they were implementing in business licencing was feeding all information about all licenses on the e-licencing portal.

"We urge various agencies to make the e-licence reform a reality. Business registration has been burdensome due to lack of information, lack of access to offices to register and lack of formalization of businesses," Twebaze said.

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