No new taxes
Jun 12, 2009
<b>Roads, education and health top budget spending</b><br><em>Taxes dropped on agro-processing</em><br><br>Finance minister Syda Bbumba announced a spate of tax relief measures for the agro-processing, hotel, education and the health sectors in bid to
Roads, education and health top budget spending
- No income tax on agro-processing
- All plastic bags banned
- Used computers, fridges banned
- USE to cover S4
- Cattle, poultry to be vaccinated
- Sh60b for agriculture credit
- Access to safe water up to 65%
- Sh10b for Rwenzori, Luwero
- Gulu-Atiak, Kapchorwa-Suam & Tororo-Mbale-Soroti roads tarmacked
Taxes dropped on agro-processing
By Paul Busharizi
Finance minister Syda Bbumba announced a spate of tax relief measures for the agro-processing, hotel, education and the health sectors in bid to jumpstart a slowing economy.
In the budget, themed “Enhancing strategic interventions to improve business climate and reinstate production to achieve prosperity for allâ€, she also announced a 5% increase in civil servants’ pay.
The economy registered a growth rate of 7% in the 2008/2009 financial year, far above the average sub-Saharan growth of 2.4%.
“Although this growth is lower than the average growth in the last five years, it remains impressive when compared to other economies in the region and beyond,†Bbumba told parliament during her budget reading.
However, growth was lower than the 8.1% that had been projected. This, according to Bbumba, was a result of the slower growth rates in manufacturing, construction, trade, transport and the services sector.
The agricultural sector, at the other hand, grew by 2.6%, compared to 1.3 % in the previous financial year.
“This was mainly due to the improved performance of food crops,†Bbumba said, although in parts of the country production had been affected by floods, pests and disease.
The minister said it had been a difficult year, with inflation up to 12.4% at the end of May and a depreciation of the shilling compared to the dollar by 34%, from sh1,645 in September to sh2,216 in May.
She announced that the Government budget was expected to grow to sh7,333b, a 15% increase of last year’s when it stood at sh6,160b.
Of this, 67% will come from domestic revenues while donor support will comprise about 33%.
The focus will be on agricultural production and value addition, transport infrastructure, reliable and affordable energy, and education, said Bbumba.
“This will provide the private sector with an enabling climate to increase production and seize opportunities in the domestic and regional markets."
Uganda has a comparative advantage in developing agriculture into a modern and highly productive sector, she noted.
“Modernising agriculture is crucial for structural transformation of the economy due to its contribution to employment, food security, foreign exchange earnings, agro-processing and tax revenue.â€
To boost agriculture, she announced that over 600,000 cows will be vaccinated against food and mouth disease, over 500,000 against lumpy skin diseases and 20 million doses of poultry vaccines will be made available against Newcastle disease.
In addition, the Government will generate 25 new crops strains that are disease resistant and produce improved yields.
Bumba also revealed that the Government allocated sh30b to an agricultural credit facility for farmers to acquire agro-processing machinery and equipment.
The revolving fund, which will be matched by an equal amount by the banks, will be lent out at a maximum interest rate of 10% for eight years.
In a further bid to stimulate agriculture, the Government scrapped taxes on income from new agro-processing investments that have been set up since July 1, 2008.
In addition, Bbumba slashed excise duty on beers produced using local barley and sorghum from 60% to 40%.
Like last year, roads take up the biggest chunk of the budget, with a total of sh1.2 trillion allocated to the sector – or 17% of the total expenditure;
New road projects announced include the rehabilitation of 395km and the tarmacking of another 1,061 km of national roads.
The energy sector takes almost sh700 billion, with the first power generation from Bujagali planned by December 2010 and the construction of the Karuma dam expected to start soon.
The finance minister has budgeted an additional sh85b towards the energy fund, launched three years ago to help develop the country’s power generation capacity, bringing the total amount in the fund to sh500b. On petroleum, Bbumba said estimates of the country’s reserves have grown from 300 million barrels in 2006, when the first discovery was made, to 2 billion barrels today.
“Additional wells are expected to be drilled in the entire Albertine Graben and exploration drilling is planned to commence in Arua, Nebbi and Kanungu districts.â€
Education takes up the second biggest share of the budget, with expenditure for the first time exceeding sh1 trillion.
Universal Secondary Education will be rolled out to cover S4, while the Government has pledged to build 6,200 new classrooms and 2,300 new latrines, the minister said.
“Government will also intensify school inspection to check on teacher absenteeism and school fires, and continue monitoring the number of children in schools.â€
Bbumba did not announce any new taxes. However, taxes in some areas were scrapped in a bid to stimulate the economy. These include import tax on essential industrial spare parts, tourist vehicles, cameras and film equipment and trucks above 20 tonnes.
She said they would make all donor-funded projects in agriculture, education and health VAT exempt.
To protect the environment, the Government imposes a ban on all plastic paper bags as well as old computers, freezers and refrigerators. The ban on kaveera will be enforced after six months and the one on old computers and fridges after three months.
- No income tax on agro-processing
- All plastic bags banned
- Used computers, fridges banned
- USE to cover S4
- Cattle, poultry to be vaccinated
- Sh60b for agriculture credit
- Access to safe water up to 65%
- Sh10b for Rwenzori, Luwero
- Gulu-Atiak, Kapchorwa-Suam & Tororo-Mbale-Soroti roads tarmacked
Taxes dropped on agro-processing
By Paul Busharizi
Finance minister Syda Bbumba announced a spate of tax relief measures for the agro-processing, hotel, education and the health sectors in bid to jumpstart a slowing economy.
In the budget, themed “Enhancing strategic interventions to improve business climate and reinstate production to achieve prosperity for allâ€, she also announced a 5% increase in civil servants’ pay.
The economy registered a growth rate of 7% in the 2008/2009 financial year, far above the average sub-Saharan growth of 2.4%.
“Although this growth is lower than the average growth in the last five years, it remains impressive when compared to other economies in the region and beyond,†Bbumba told parliament during her budget reading.
However, growth was lower than the 8.1% that had been projected. This, according to Bbumba, was a result of the slower growth rates in manufacturing, construction, trade, transport and the services sector.
The agricultural sector, at the other hand, grew by 2.6%, compared to 1.3 % in the previous financial year.
“This was mainly due to the improved performance of food crops,†Bbumba said, although in parts of the country production had been affected by floods, pests and disease.
The minister said it had been a difficult year, with inflation up to 12.4% at the end of May and a depreciation of the shilling compared to the dollar by 34%, from sh1,645 in September to sh2,216 in May.
She announced that the Government budget was expected to grow to sh7,333b, a 15% increase of last year’s when it stood at sh6,160b.
Of this, 67% will come from domestic revenues while donor support will comprise about 33%.
The focus will be on agricultural production and value addition, transport infrastructure, reliable and affordable energy, and education, said Bbumba.
“This will provide the private sector with an enabling climate to increase production and seize opportunities in the domestic and regional markets."
Uganda has a comparative advantage in developing agriculture into a modern and highly productive sector, she noted.
“Modernising agriculture is crucial for structural transformation of the economy due to its contribution to employment, food security, foreign exchange earnings, agro-processing and tax revenue.â€
To boost agriculture, she announced that over 600,000 cows will be vaccinated against food and mouth disease, over 500,000 against lumpy skin diseases and 20 million doses of poultry vaccines will be made available against Newcastle disease.
In addition, the Government will generate 25 new crops strains that are disease resistant and produce improved yields.
Bumba also revealed that the Government allocated sh30b to an agricultural credit facility for farmers to acquire agro-processing machinery and equipment.
The revolving fund, which will be matched by an equal amount by the banks, will be lent out at a maximum interest rate of 10% for eight years.
In a further bid to stimulate agriculture, the Government scrapped taxes on income from new agro-processing investments that have been set up since July 1, 2008.
In addition, Bbumba slashed excise duty on beers produced using local barley and sorghum from 60% to 40%.
Like last year, roads take up the biggest chunk of the budget, with a total of sh1.2 trillion allocated to the sector – or 17% of the total expenditure;
New road projects announced include the rehabilitation of 395km and the tarmacking of another 1,061 km of national roads.
The energy sector takes almost sh700 billion, with the first power generation from Bujagali planned by December 2010 and the construction of the Karuma dam expected to start soon.
The finance minister has budgeted an additional sh85b towards the energy fund, launched three years ago to help develop the country’s power generation capacity, bringing the total amount in the fund to sh500b. On petroleum, Bbumba said estimates of the country’s reserves have grown from 300 million barrels in 2006, when the first discovery was made, to 2 billion barrels today.
“Additional wells are expected to be drilled in the entire Albertine Graben and exploration drilling is planned to commence in Arua, Nebbi and Kanungu districts.â€
Education takes up the second biggest share of the budget, with expenditure for the first time exceeding sh1 trillion.
Universal Secondary Education will be rolled out to cover S4, while the Government has pledged to build 6,200 new classrooms and 2,300 new latrines, the minister said.
“Government will also intensify school inspection to check on teacher absenteeism and school fires, and continue monitoring the number of children in schools.â€
Bbumba did not announce any new taxes. However, taxes in some areas were scrapped in a bid to stimulate the economy. These include import tax on essential industrial spare parts, tourist vehicles, cameras and film equipment and trucks above 20 tonnes.
She said they would make all donor-funded projects in agriculture, education and health VAT exempt.
To protect the environment, the Government imposes a ban on all plastic paper bags as well as old computers, freezers and refrigerators. The ban on kaveera will be enforced after six months and the one on old computers and fridges after three months.