Prime
Nakalema rolls up sleeves to protect local investors
The Head of State House Investors Protection Unit, Col Edith Nakalema (left), during a meeting with officials from government institutions and banks in Kampala yesterday. PHOTO | ISAAC KASAMANI
What you need to know:
- She says high taxes on SMEs and high-interest rates are frustrating investments.
The head of State House Investors Protection Unit, Col Edith Nakalema, yesterday summoned several heads of key government Ministries, Departments, and Agencies as well as financial institutions to provide answers to queries raised by Small and Medium Enterprises (SMEs).
SMEs claim their efforts on investment are being frustrated.
Speaking at a meeting that she convened at the Office of the Prime Minister’s Conference Hall, Col Nakalema cited alleged high taxes on SMEs, the high-interest rates charged by commercial banks , and the high cost of standardising products for exports, among other challenges reported to her office.
“We have received several complaints about the cost of accessing business finance. In other words, the interest charged on loans by commercial banks are high. We have met with the Finance ministry and the resolution is that the banks are going to soften the conditions to promote investment,’’ she said.
“The other challenge we have received is about taxes. I am glad the Commissioner General of Uganda Revenue Authority has explained many steps they are taking to solve this,” she added.
Col Nakalema also tasked the Uganda Bureau of Standards (Ubos) that was represented by the deputy executive director, Ms Patricia Ejalu, to explain delays in the certification of products.
“You take long to issue certificates and by the time they get them, they have already lost their money,” she said.
Commercial Farming and Processing Uganda Limited said she had spent Shs2.25m to certify one product after a long hustle.
Dr Joseph Muvawala, the executive director of National Planning Authority, alleged that some UNBS staff reportedly take bribes from big companies to delay certification of products of SMEs so as to monopolise the market.
“They [SMEs] are beginning to complain that every time they start a product, big companies bribe your [UNBS] people to close them. I can give you one example, the one in toilet paper. Most of the small toilet paper [companies] have closed and they are all complaining of the same person,” he said.
Ms Ejalu said she would organise a session for SMEs sensitisation, but maintained that all applicants have to go through stages to standardise products.
“Standard applies to everybody whether you are small, medium or large. The amount of aflatoxin in our products remains a challenge. Everybody had to meet the standard,’’ she said.
On the issue of tax, the Commissioner General of Uganda Revenue Authority, Mr John Musinguzi, encouraged SMEs to continue paying taxes for development.
“We are still under collecting. One of the parameters that show us that we are under-collecting taxes is tax to tax to Gross Domestic Product ratio. For the first time, we have stepped into 14 percent in the last financial year. But for any country to develop, we need to be collecting at least 20 percent of GDP,” he said.
Post-covid funds
Responding to the concern by SMEs that some staff in banks were expressing ignorance of the availability of the post-Covid recovery funds channelled through banks with a lower interest rate, the vice chairperson of the Uganda Banker’s Association tasked banks to avail the funds. The director of economic affairs at the Finance ministry, Mr Moses Kaggwa, said the government set aside Shs200b as a post-Covid recovery fund for SMEs, but only Shs12b has been lent out.
