Traders seek more funding to recover from lockdown effects

Kampala, Uganda | THE INDEPENDENT | Kampala based traders have asked the government to make more money accessible to small scale traders through the Uganda Microfinance support centre.

Issa Ssekitto, the spokesperson of Kampala City Traders Association-KACITA, an umbrella for the business community, says that businesses need a stimulus to recover from the effects of the COVID-19 lockdown which started with the outbreak of the COVID-19 pandemic in March. He says that although the government has partially lifted the lockdown, many businesses are yet to recover.

The Ministry of Finance has so far allocated 455.18 billion Shillings to Uganda Development Bank (UDB) to support the private sector while the Microfinance Support Centre was given 50 billion Shillings for the provision of affordable credit to mitigate the negative impacts of COVID-19 and ensure continuity of the business activities.

But Ssekitto is concerned that money channeled through UDB is not easily accessible to ordinary traders with low capital. He points out that UDB does not issue soft loans or even financial support to small and medium scale enterprises. Sekito was over the weekend speaking at the dialogue on the recently approved budget for financial year 2020/2021.

Ssekitto also asked the government to waive taxes for the period that the country was under lockdown. In May, KACITA petitioned the government to intervene and save tenants whose landlords were seeking payment for the period their business were under lock. However, no kind of help has been received.

Siraj Maganda, a member of the Civil Society Budget Advisory Group- CSBAG says the government should also write off individual taxes like Pay as You Earn from low-income salary earners. He argues that taxing little income affects expenditure in the economy yet the public needs stimuli to be able to make and spend money.

Irene Mbabazi Irumba, the acting Commissioner Domestic Taxes said the government is reconsidering waivers but the matter is yet to be presented before parliament and later to the cabinet for approval.

In April 2020, while pitching for funding from the International Monetary Fund (IMF), the Minister of Finance Matia Kasaija and Bank of Uganda acting deputy governor Dr Adam Mugume committed to halting P.A.Y.E by the most affected sectors like manufacturing and tourism.

Also, that payment of corporation tax for qualifying companies and Small, Medium Enterprises (SMEs) in the most affected sectors with a turnover of fewer than 500 million Shillings per annum would be delayed by six months without attracting interest. They also said the country will waive interest on tax arrears to lessen businesses’ tax liability obligations to the government.

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