The rift between government and traders over taxes will not end unless the fundamental issues are dealt with.
One of the core fundamental issues is expanding the tax base through empowerment of the population.
Currently Uganda’s Tax to Growth Development Product (GDP) ratio stands at 14 percent as compared to the recommended 18 percent.
The reason Ugandans pay few taxes is because they have a low purchasing power and therefore are unable to consume goods and services on the market.
It is worthy to note that traders don’t pay taxes, they instead collect taxes from consumers because whatever tax that is levied on them, is again transferred to the consumers.
So, the traders would not mind how much tax they pay as long as the consumers have the capacity to buy their goods and services.
Government can expand its revenue base by investing in agriculture which employs 61 percent of Ugandans.
Take note that the sector contribution to the GDP is only 24 percent which explains the low purchasing power by the majority of Ugandans.
If Uganda deliberately invested in key strategic agricultural products by allocating resources across the value chain, there would be increased production in quality and quantity.
That would give us the capacity to sustainably supply the available market. This has the potential to bring better returns in the economy in a short time.
A case in point, statistics from Uganda Bureau of Statistics (UBOS) indicate that an average of 57 percent of farming households plant maize.
By 2022, Uganda’s total maize production stood at 5 million metric tonnes, however the total maize demand globally stood at 852 million metric tonnes (MT) valued at 153.4billion dollars.
According to the External Trade Statistics Bulletin, maize exports stood at USD 206.6 million from 489,821 MT of maize between Sept 2022 to August 2023.
If we only multiplied these exports by five times, that is 2.5 million MT of maize, we would earn one-billion-dollar worth of foreign exchange from maize alone.
The reasons our maize exports are low is because of poor quality due to poor post-harvest handling.
According to the Grain Council of Uganda, Post-harvest handling of grains accounts for 30 percent loss of our total production. The Grain Trade Policy of Uganda 2015 put post-harvest handling losses at 37 percent.
To have increased production both in quality and quantity, you need to invest in research, irrigation, mechanisation, application of fertilisers, pesticides, agro-based industries and farmer education on quality management.
If the same investment was done in coffee, tea, cassava, bananas, dairy farming etc.
with each product fetching one billion dollars’ worth of foreign exchange in addition to the domestic consumption, Uganda’s economy would be transformed within one five-year term of a political office.
How much money does the government need to achieve this? Here is the calculation; In August 2023, Government of Uganda launched a Danish funded 5.5 billion irrigation project expected to help 12,000 small holder farmers.
In the last five years alone, according to a story filed by NBS TV, one investor called Amina Moghe of Atiak sugar has received over 400 billion.
If 5.5 billion can do irrigation for 12,000 small holder farmers, then 400 billion given to Atiak sugar can do irrigation for 870,000 farmers.
So, money given to Atiak can solve our irrigation challenges. Then money given to Pineti for a non-existent Lubowa Specialised Hospital can fix the fertilisers.
If you go on Alibaba website, sh2m can buy a small walking tractor capable of ploughing 2 acres per day.
President Museveni’s home (state house) spends 2.8 billion per day, that is equivalent to 1,400 tractors.
So, his budget can provide 500,000 of these tractors to small holder farmers. With each tractor helping ten farmers, a total of 5 million farmers can benefit.
I haven’t talked about the 30b given to Musenero to manufacture non-existent Covid-19 vaccines and other such investors.
Instead of allocating tax payer’s money in such strategic areas, the government is instead recruiting Assistant Resident District Commissioners to teach Ugandans how to love their country.
You simply realise that those who run our affairs are either incompetent at their job or deliberately want us in poverty!
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