Uganda: Budget for 2017/18

Posted on Updated on

Finance minister has presented national budget for 2017/18 to Parliament in April 2017. The budget, which is hoped to deliver Uganda into middle-income status has seen sectors like electricity, oil and gas, ICT, education, health and agriculture receiving substantial funding. Government plans to raise Shs14 trillion, about 48% of its Shs 29 trillion budget, through local revenue collections, and the rest through budget support and borrowing, according to the Budget Framework Paper 2017/18, to boost revenues. Government also plans to increase taxes on sectors like beverages, tobacco, spirits and others.

Corporate Tax:

  • As an incentive for businesses to invest upcountry, deductions for accelerated depreciation have been introduced. This will allow recovery of costs of acquiring plant and machinery and construction of industrial buildings much faster before the payment of corporate income tax;
  • To improve compliance in rental income, Minister of Finance issues minimum rental charge to estimates of rent based on location and value of properties, as basis for rental tax for non-compliant taxpayers for failing to file a return or filing a deceptive return;
  • The income of a body established by an Act of Parliament to regulate the conduct of professionals, such as the Institute of Certified Public Accounts of Uganda and the Uganda Law Society has been exempted;
  • Re-instatement of preliminary allowance at 50% and 20% on entitled property and industrial infrastructure respectively outside a 50km radius from Kampala;
  • Related party transactions for Transfer Pricing objective prolonged to include employment relationships. Failure to provide records in respect of transfer pricing within 30 days after the request will now be liable to a penal tax equivalent to UGX 50M and 20M;
  • Re-introduction of withholding tax at 15% on winnings of sports or pool betting;
  • SACCO Income tax exempted for 10 year;
  • The Bujagali Energy Limited has been exempted from corporate income tax (for a 5-year period) as part of the effort to reduce the cost of power effective 1 July 2017;
  • The income of a Savings and Credit Cooperative Society is exempted to promote savings;
  • Introduction of interest rate caps to avoid exceeding the assemblage of the principal and penal tax including waiver of any outstanding interest due and payable as of 30th June 2017.

Energy and mineral development:

To meet the energy needs of Uganda’s population for social and economic development in an environmentally sustainable manner.

  • To use the country’s oil and gas resources to contribute to early achievement of poverty eradication and create lasting value to society.
  • To develop the mineral sector for it to contribute significantly to sustainable national economic and social growth.

 Education:

The Education and Sports sector priorities are aimed at enabling the country to offer education as a basic human right with the main goal of equipping learners/students/trainees with relevant knowledge and skills necessary for socioeconomic transformation and development by 2040. UGX 2.4 trillion allocated for Education and Skills Development as the third top priority sector (12% of the budget) representing an increase in percentage of budget spend 12% of budget but a decline in actual funds allocated. The education sector will get roughly Shs 2.47tn, slightly above what it got last year.

Supporting private sector development for export promotion and import substitution:

In order to improve Uganda’s balance of payments position, the private sector will be supported to enhance exports and substitute imports through the following priority interventions:

  • Provision of fully serviced sector demarcated industrial and business parks with adequate electricity, water, telecommunications and Lake/Rail and Road access at Luzira, Jinja and Namanve/Bukasa
  • Tourism Market Promotion, Tourist Product Development and Tourism Skills capacity development to enable world-class standard service delivery for certified hotel and restaurants
  • Promoting value addition by Small and Medium Enterprises (SMEs) through skills training, work space provision and financing SME product start-up kits; and
  • Increase efficiency in investment promotions through roll out of the One Stop Centre.

Agriculture:

Agriculture, where more than three quarters of the population earns a living, will get at least Shs 863bn, a 4.8% increment compared to FY 2016/2017.

Infrastructure:

Completing Oil related Infrastructure Development to support the commercialization of Oil and Gas sector with a view to have the first oil out in 2020.

  • Infrastructure and oil sector investments predicted to contribute to economic rebound to growth rate of 5.5% in FY 2017/18;
  • As for the Oil and Gas sector, 98% of land acquisition for the Oil Refinery has been completed.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s