Uganda to allow firms to defer tax payments to buoy lockdown-battered economy

The Uganda government will roll out a series of measures including tax waivers and deferments to help buoy businesses battered by the coronavirus-induced lockdown and global economic downturn, President Yoweri Museveni said on Thursday.

The International Monetary Fund (IMF) last month nearly halved its forecast for the pace of Uganda's economic output for the financial year ended in June to 3.3%, citing the impact of COVID-19. Economic growth in the year ended June 2019 was 6.5%.

In a state of nation address, Museveni said his government would allow some firms including small and medium-sized enterprises a three-month delay of payment of corporation tax that was supposed to be due between April and June. He did not give details on exactly when the delay would begin.

The tax relief and other measures, he said, were "to provide liquidity to private firms that have been affected by the COVID-19 lockdown." The government would waive interest on tax arrears and also allow some firms to postpone payment of pay-as-you-earn (PAYE) tax until September 2020, he said.

Authorities, he said, would also extend financial support to the country's water and electricity utilities to enable them to continue to operate after a sharp fall in revenues as a result of the lockdown and mounting joblessness. Uganda's economy of about $27 billion - also a prospective crude oil producer - has traditionally depended on tourism and exports of key commodities like coffee, tea, cotton and maize.

But the shutdown of global travel meant the country's tourism sector collapsed overnight, with the government estimating Uganda will lose $1.6 billion annually as result. Uganda implemented one of Africa's most sweeping anti-coronavirus lockdowns, including shuttering nearly all businesses, closing borders and schools.

The east African country has a relatively low COVID-19 caseload of 522 infections and no deaths. The World Health Organisation and others worry that a sudden spike in infections could quickly overwhelm the country's already struggling healthcare system.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)