The COVID-19 pandemic has caused severe contractions of economic activity. It has caused a combination of global supply chain disruptions, travel restrictions, limits of personal contacts among others.
To overcome the toxic effects of the pandemic, experts have revealed measures East Africa countries should implement to ensure economic recovery post COVID-19.
During a webinar organized by EY Uganda on Monday, experts revealed various interventions that will balance economic activity to increase demand, increase access to credit and increase tax collections among others.
The Country Manager, EY Uganda, Godfrey Byamugisha (pictured) said that in order to mitigate the impact caused by the pandemic, interventions made by regional economies especially East Africa Community should target attracting more foreign direct investments which he said will increase economic activity.
“There is a clear impact of COVID-19 on our lives and business. Various economies have responded, but the war should be to attract foreign direct investments in East Africa,” he said.
Allan Mugisha, Tax Partner at EY Uganda noted that if government is to foster tax administration and collection, it will require higher external borrowing and postpone some expenditure.
He said that Uganda Revenue Authority (URA) might not reach the collection target if the current slow economic activity persists.
He applauded URA’s recent business continuity measures and tax amendment proposals including extension of tax filling dates, installment payments, more online access and others while tax amendment proposal on income exemptions, new tax regimes for small businesses, COVID motivated amendments and others he said will improve tax administration.
Muhammed Ssempijja from EY Uganda said that there is need to invest more in the economy during this current situation to allow maximization of employment opportunities and increase the taxable base through increasing the budget of key sectors that have a high productive margin and are labour intensive including SMEs and big corporations.
“Work at watering the economy to expect more fruits especially under this pandemic. Differ on consumption, but invest more in key sectors to get more employment and tax,” he said.
By Drake Nyamugabwa