Officials from the private sector have reacted with mixed feelings over the budget. Moses Mugalu gathered their views.
Geraldine Ssali, Acting managing director, NSSF:
The budget was largely as expected. We welcome the government’s pronouncement on the Public-Private Partnerships (PPPs) on delivering infrastructure. We hope parliament passes the PPP bill expeditiously to drive the economy.
This falls within our strategic plan to explore such arrangements once an enabling law is in place. She also mentioned that Shs 2,329.1 brillion of the budget would come from the domestic market. This will surely give NSSF an opportunity to participate especially in the aent of shrinking foreign aid.
The minister has also mentioned that the inflation rate is expected to reduce to single digit figures, resulting into increased strength in our currency. This means that our return to members will be more affordable and sustainable .
Fabian Kasi, managing director, Centenary Bank:
As a banking sector, we are happy that the economy is planned to grow at 6 per cent, albeit less than the planned 7 per cent. However, we at the same time see a budget that is increasing taxes on certain things and terminating tax exemptions and waivers on certain sectors including agriculture, which is likely to affect the costs of doing business, especially in those critical sectors.
This may pose a challenge to our clients and, therefore, make it hard to collect the planned taxes. We saw a shortfall in taxes last year by Shs 475bn despite a growth of 5.7 per cent.
With the continued shortfall, we are likely to see increased government borrowing, which will put pressure on interest rates, making it hard for banks to offer affordable credit. We also see taxes on bank charges and money transfers which will affect banks’ ability to mobilize savings.
Stephen Kaboyo, managing director, Alpha Capital:
The fiscal strategy was heavily skewed towards public investments in energy, roads, and railway, underpinned by the objective of unlocking the country’s growth potential. Reading between the lines, one could also see a vision of inclusive growth, making provisions for tourism and agriculture and reforms geared towards increasing productivity and competitiveness.
It is, however, walking a tight rope for government given the limited fiscal space as a result of challenges in domestic revenue mobilization with the ratio of revenue to GDP holding at 13 per cent, in addition to shrinking budget support from the donors. Clearly, the country’s needs are growing at a much higher rate than the productive tax base.
On the proposed borrowing to fund the budget, the statement fell short of mentioning other potential sources of government financing. While there was mention of near commercial and commercial sources, no specifics were highlighted.
Ali Amir, managing director, Uganda Telecom
Uganda Telecom appreciates the move by the government to widen the tax base further and its continued focus to improve Uganda’s business climate. However, as an operator in the telecommunication industry we will be affected by the proposal to increase excise duty on fees charged on mobile money withdrawals by 10 per cent.
While this tax measure is expected to generate vital revenue for the government, it will make it expensive for ordinary Ugandans, especially those in rural Uganda, to receive money. However, we appreciate the government’s efforts to accommodate alternative banking approaches including mobile banking in the 201415 budget.
Source : The Observer