Finance Minister Matia Kasaija On The FY 2020/2021 Budget
The Minister for Finance Matia Kasaija, while reading his budget speech for FY 2020-2021, he has revealed the measures that are to be followed to improve the availability of investment finance and the cash-flows of Micro, Small and Medium Enterprises, and other manufacturing firms.
Among them, he mentioned providing credit through SACCOs and microfinance institutions to support micro and small-scale enterprises.
“I am proposing an allocation of UGX 94 billion for FY 2020/21. Increase access to credit at UDB to offer low-interest financing to manufacturing, agribusiness, and other private sector firms, for which I have provided UGX 1,045 billion over the medium term,” said Kasaija.
The Finance Minister added that they are to provide for banks to restructure loans to their borrowers who are facing liquidity constraints. Provide additional liquidity on a case by case basis, as recently guided by the Bank of Uganda.
He also mentioned that they are to reduce charges on mobile banking and mobile money transactions. To improve efficiency, reduce person-to-person contact to prevent the spread of the Coronavirus.
“I am deferring until September 2020, the payment of any Corporate Income Tax and Presumptive Tax due April 1st, 2020 to 30th June 2020, for tax complaint businesses with a turnover of less than UGX 500 million per annum,” said Kasaija.
Among the measures, Matia Kasaija added expediting the payment of arrears owed by Government to private sector firms commencing July 2020. He said that for this he has provided UGX 673 billion to address liquidity constraints faced by suppliers of government. Priority will be given to SMEs.
While addressing the peace and security of persons and property at the community level, we will implement the following measures, Matia Kasaija said that they are to intensify community vigilance by strengthening the Local Council system, promote community policing in coordination with Local Defence Units (LDUs).
He added that they are to complete the rollout of the Safe City CCTV project in Jinja, Lugazi, Kayunga, Njeru, Gulu and Masaka and ensure its effective utilization in monitoring crime and responding to distress calls.
“The total public debt as of December 2019 amounted to USD 13.3 billion, with external debt accounting for USD 8.59 billion or 64.4% while domestic debt amounted to USD 4.74 billion or 35.6% of total debt stock,” stated Kasaija.
The Finance Minister said that to ensure that public debt remains sustainable, they will implement the Domestic Revenue Mobilization Strategy to increase the government’s capacity to finance programs with less reliance on domestic and external borrowing.
He added that in response to the Coronavirus crisis, the government has commenced negotiations with some creditors for debt relief. This will free resources to finance interventions in the fight against the pandemic.