IMF commends Uganda on financial management

By Vision Reporter

President Yoweri Museveni Tuesday received the IMF delegation led by the country representative Ana Lucia Coronel who called on him at State House Entebbe.

The President and his guests discussed matters related to the financial administration especially the issue of tax collection.

The President informed them that the problem of tax collection lies in the status of the economy which is largely a traditional subsistence one.

According to the 2002 National Population census, 32% of the population was in the money economy and 68% were in the traditional subsistence economy.

Museveni said this coupled with the challenge of inadequate infrastructure especially electricity affects production.

He said a deliberate move is necessary to change the attitude of the people to adopt commercial agriculture and also move fast on infrastructure particularly the development of energy, roads and railway lines, in-order to lower the cost of production.

"That is why I started rural projects that have changed the lives of those people. If you visit some of the areas where people listened to my advice, you find that they have changed from traditional to commercial agriculture. Also production is primary and that is my starting point. Produce and make profits the rest will be easy," he noted.

On tax exemption to some goods, President Museveni clarified that it was at the time of CHOGM that building materials for the construction of hotels needed for hosting delegates that the move was allowed.

He said that even firms that import machinery enjoyed the same tax holiday as their products attracted taxes.

“I am a believer in factories, and my view is that it is wrong to tax machinery. I regard the factory as the bone marrow. If you remove the blood, that will lead to leukemia. So if a factory is built it does not only create employment but also pays taxes directly or indirectly," he said.

The IMF Country Resident Representative, Ana Lucia Coronel noted that Uganda has everything needed to attract investment.

She cited the area of tourism, pointing out that the country has a great potential and with energy in place a lot can be done in all economic sectors.

She emphasized the need to expedite the development of energy and other core projects particularly the construction of Karuma hydro power station that would provide enough electricity to propel fast the development of the country's economy.

Ana commended the government for the improvement in the financial management in the recent past, tax collection and improvement at the central Bank that has controlled inflation.

She also commended URA for the job well done but noted that more needs to done.

"We got a good impression in the URA the personnel are very professional, they know what they are doing, but more needs to be done," she said.