Finance Ministry Requests Gov’t To Bail Out Private Business Ventures Affected By COVID-19 Lockdown

Finance Ministry Requests Gov’t To Bail Out Private Business Ventures Affected By COVID-19 Lockdown

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By Spy Uganda

The Ministry of Finance has proposed to government to work out a way of bailing out private business ventures in Uganda that have been negatively impacted by the Coronavirus (COVID-19) lockdown and its consequent effects on the economy.

President Yoweri Museveni revealed on Thursday during his State of the Nation Address that the Ministry of Finance, Planning and Economic Development is proposing the following measures, to provide liquidity to private firms that have been affected by the COVI-19 Lockdown.

The proposals were highlighted in President Museveni’s State of Nation Address which he read yesterday to parliament via zoom and they include:

(i)   Allow corporations including small and medium sized enterprises (SMEs) to delay payment of corporation tax or presumptive tax for taxes due between April and June 2020 and for tourism, manufacturing, horticulture and floriculture to defer until September 2020;

(ii) Defer payment of Pay-As-You Earn (PAYE) tax by those sectors which are most affected until September 2020;

(iii) Waiver of interest on tax arrears;

(iv) Support to water and electricity utilities in order to ensure continued supply of these essential services to consumers during the period April to June 2020;

(v)  Expedite payment of outstanding VAT refunds;

(vi) Payment of domestic arrears for goods and services supplied to Government by the private sector;

(vii)       For those unable to pay their loans, Government through the Bank of Uganda has already put in the gazette the measures to support businesses; including allowing extension of repayment periods, postponement of loan repayment for a limited period, relaxing the conditions for non-performing loans, reduction of reserve funds commercial banks are required to keep with Bank of Uganda and creating a special liquidity facility to rescue businesses that are not able to meet operational costs due to low demand or reduced production due to COVID-19;

(iii) Capitalisation of Uganda Development Corporation (UDC) with Ug Shs. 100 billion to enable Government to invest in strategic areas;

(ix) Boosting funding to Uganda Industrial Research Institute (UIRI) in FY 2020/21 to continue with innovation research and incubation of business start-ups.

 (x) Securing funding for the development of Kampala Industrial Business Park at Namanve and for power transmission and substations for Mbale, Kapeeka, Bweyogerere, Kasese, Soroti, Luzira, Jinja and Mbarara industrial parks; and

(xi) Provision of additional UGX 300 billion immediately to boost agricultural production and productivity for seedlings, fertilizers, irrigation, storage facilities and value addition. The target crops are coffee, cotton, tea, palm oil and other oil seeds, cassava, maize, cocoa and dairy, beef, and fish production.

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