Experts have stated that Uganda requires tax laws that support the growth of local companies regardless of whether they invest domestically or internationally.
Dr. Fred Muhumuza, an economist and lecturer at Makerere University, emphasized regulations that need to be modified for business success during the second day of the virtual economic conference organized by the Institute of Certified Public Accountants of Uganda (ICPAU).
“In a global market place, domestic businesses or sectors might compete with their international counterparts, attracting policies that seek to promote exports while reducing imports. “A key goal of tax policy is to collect enough income to fund government spending while keeping budget deficits and debt ratios manageable,” Muhumuza explained.
The majority of the determinants of business competitiveness, according to Muhumuza, are determined by institutions, regulations, and laws inside the local economy.
Individual businesses may then be ‘competitive’ globally in the sense that they have a cost or other advantage over their overseas competitors, depending on the currency rate, interest rates, and other factors.
Muhumuza suggested that international investors be granted tax breaks, but that it would be more helpful if domestic investors, such as those in real estate, were taxed less to encourage them to lease their assets.
“To improve corporate competitiveness, we must do more than just tax policy. In most situations, a competitive business may generate returns that are higher than its cost of capital. “Judging ‘competitive’ to an economy as a whole rather than a specific firm is more challenging conceptually,” he added.
Prof Charles Kwesiga, executive director of the Uganda Industrial Research Institute (UIRI), stated in his presentation that the government should strive to make technology accessible in the agricultural sector.
According to him, this will boost the manufacturing of high-quality items.
“Agriculture remains Uganda’s primary source of income. It is Uganda’s largest employment and a key sector of the economy. Farmers’ inadequate usage of fertiliser and quality seeds, as well as a lack of irrigation infrastructure, are impeding the sector’s commercialization, he added.