Ugandan Members of Parliament have asked government to consider controlling profit repatriation by foreign companies.
In a meeting with State Minister for Investment, Evelyn Anite to deliberate on the Investment Code Amendment Bill, 2017 on Thursday, MPs) sitting on Parliament Finance Committee Chaired by Henry Musasizi called upon government to consider capping profit repatriated by foreign investors.
The object of the bill is to revise, modernize and replace the 1991 Investment Code Act and to make it conform to the provisions of the Constitution.
Lawmakers on the Committee argue that government has been so lenient to foreign investors who take away a lot of money from the country hence failing the country’s economic growth. It is important to note that after paying 30% Corporation tax (tax from profits made), foreign companies are at liberty to repatriate the remaining 70%.
“We think the policy should change because we have given a lot of favors to investors for a long time, we think it is high time we benefit from the favors we have provided to investors among which are the percentage of profit that can be taken out of the country in a given period of time,” Musasizi said.
He argued that foreign investors must be encouraged to keep the money here and reinvest it in the country instead of taking it elsewhere.
In response, Anite said that the changes desired by legislators can only be achieved through a thorough policy change.
“The position of government is that an investor should repatriate all his profit that is after he has paid the utilities, tax, salaries and the balance we give him the liberty to repatriate it with no conditions,” Anite said.
The Ministry Commissioner in Charge of Economic Development Policy, Minister of Finance, Joseph Enyimu added that the Ministry is open to the discussions in that line.
“But the position under the Finance Institution Act and Services is that we liberalized the foreign exchange market meaning that the capital account of Uganda is liberalized,” Enyimu said, adding that government is encouraging companies to list on Uganda Securities Exchange so that Ugandans can buy shares and co-own the top companies.