Kampala- The Ministry of Finance has said government will maintain existing tax incentives to boost exports and attract Foreign Direct Investment (FDI) into the country.
Uganda continues to struggle in the two areas which has resulted into a rapid growth in the balance of trade deficit.
Responding to a question from Daily Monitor, Mr Keith Muhakanizi, the Ministry of Finance permanent secretary, said tax incentives are not unique to Uganda, adding it was important that government maintains the current incentives regime to help in growing investments and exports. “The incentives given by government [target exporters and foreign direct investment from both local and foreigners]. However, some people think they are only for foreign investors,” he said.
A number of people have criticised government for offering undeserved foreigners incentives while ignoring local investors.
Mr Daniel Birungi, the Uganda Manufactures Association executive director, told Daily Monitor some manufactures have benefited from government incentives but there is need to do more.
“Incentives are there but there is need to expand them [to benefit more manufactures],” he said.
Mr Birungi said manufactures, through the Investment Code Bill, which is currently before Parliament, have given a number of suggestions that will benefit local manufacturers.
According to the G-20 Development Working Group report, incentives, especially in low developing economies, if well utilised, help companies to establish their niche as well as understand the countries in which they operate to deliver long term and better services.
Such incentives, for instance tax, however, the report says, must be reviewed over time to spur innovation as well as spreading out resources to other companies that might need them to set off.