Report. Left to right: Senior public sector specialist of the World Bank Moses Misach Kajubi, State Minister of Finance for Planning David Bahati, World Bank country manager Christina Malmberg Calvo and Ms Racheal Sebudde, a senior economist at the bank, launch the financial institution’s report on the state of Uganda’s economy in Kampala yesterday. PHOTO BY RACHEL MABALA
Key issues. The World Bank recommends, among other things, that Uganda should strengthen its tax system by reducing exemptions, broadening the tax base and tapping into hard-to-reach informal activities to lift taxable proportion of the Gross Domestic Product (GDP) from 14 per cent to 20 per cent.
Kampala. The World Bank has advised government to expand its tax base in order to sustain economic growth and development.
“An important way to broaden the tax base is to improve public service delivery and Public Investment Management. Tax payers need to see and sense that their taxes are well spent. Another important thing is to improve transparency around who pays taxes, and who is exempted,” Ms Malmberg said.
“Just as government has in recent years improved transparency around the national budget process, it now introduce and accountability measures in the collection and management of public revenue,” she added.
Ms Malmberg said Uganda collects about 14 per cent of GDP in revenue, which is below the country’s tax collection potential.
She said as a comparison, Kenya collects about 18 per cent of its GDP in revenue and Rwanda 16 per cent.
Currently less than 7 per cent of the working population and 10 per cent of firms are registered as taxpayers in Uganda.
Ms Malmberg said the second measure is to make sure that the tax instruments become more efficient, pointing out that improving the efficiency of instruments means,among other things, decreasing the number of tax exemptions that are granted.
The third measures she proposed is to raise efficiency of the tax administration, strengthen the capacity of tax authorities in terms of staffing and IT risk-based so that they can pursue modern tax audit methods.
Presenting the key findings of the report, Ms Racheal Sebudde, a senior economist at the World Bank, Uganda’s fiscal deficit was 4.9 per cent of GDP, 1.5 percentage points lower than the previous budget of 2017/18 of 4.8 per cent.
Ms Sebudde said tax revenue is being projected at 12.9 per cent this financial year compared to 14 per cent of the previous year due to under performance on interest income, corporate income, Value Added Tax (VAT) on local goods and excise duty on imports.
“From the estimated 5.5 per cent in Financial Year 2017/18, the economy could accelerate to 6 per cent in subsequent two years, driven by investment in oil infrastructure-roads, pipeline infrastructure could boost growth,” she said.
Ms Sebudde said continued good weather is resulting in stronger agricultural performance registering growth rate of 6.3 per cent.
Meanwhile, the high global economic growth could push private investments, exports demands for Uganda’s commodities and remittance in Uganda. Lately, Uganda has registered recovery in high economic growth in the four quarters.
She said industry registered growth of 6.4 per cent with manufacturing growing at 5.4 per cent, services sector accelerated to almost 9 per cent driven by the ICT with 15 per cent growth financial services at 12 per cent and trade at 7.6 per cent.
Recommendations from the report include reducing tax expenditures, which have the potential to raise revenues by up to 5 per cent of GDP annually and enhancing public awareness, transparency, and civil society engagement to increase voluntary tax compliance.
The World Bank recommends, among other things, that Uganda should strengthen its tax system by reducing exemptions, broadening the tax base and tapping into hard-to-reach informal activities to lift taxable proportion of the Gross Domestic Product (GDP) from 14 per cent to 20 per cent.
Dec. 11 - From political posters to bottles of wine and kitchen aprons, the face and name of Nelson Mandela are a potent commercial and political brand in South Africa. David Pollard looks at what changes his death will make to the Mandela legacy.
The face that launched a thousand protests. And now it seems, a thousand product lines. Brand Mandela has become big business. So big it threatens to overshadow the man himself. David Haigh of brand valuation experts, Brand Finance. SOUNDBITE (English) DAVID HAIGH, CEO, BRAND FINANCE, SAYING: ''His fame is huge, and therefore many people are now rushing around trying to get their piece of the fame, including his own family and it's well recorded that they are arguing, squabbling, digging up past ancestors. You know, there's a whole debate going on which is just so sad, it's undermining the very thing he was creating.'' But it's not uncomplicated. Mandela divided management of his legacy between trusts to handle his family wealth. And the Nelson Mandela Foundation. It owns copyrights to Mandela's prison number - used on a clothing, wristbands and mobile phone starter packs - and his main names. The Nelson Mandela Children's Fund and some 50 other institutions around the world are also authorised to use those. But a recent count showed that several dozen companies with no connection to Mandela were using that name with no permission. Many more using Madiba. Earlier this year, the South African government warned against fake charities trying to cash in on one or the other. Feuding between family members has also grabbed headlines. Mandela's friend, lawyer George Bizos fought with two of Mandela's daughters for control of companies managing Mandela proceeds. Brand Finance says tight legal management to nail down the intellectual property rights is a must if Brand Mandela is to stay true to its origins. SOUNDBITE (English) DAVID HAIGH, CEO, BRAND FINANCE, SAYING: ''You have to have very good legal advice. Secondly, you have to have a very good board of trustees. And I would be recommending a global board of trustees of great stature to prevent the squabbles that are going on between his family.'' Super trustees, then, to manage what is already becoming a mega brand. Its valuation difficult to estimate, but likely to run into tens, if not hundreds of million of dollars.