President Yoweri Museveni has explained the strategic value of high taxes in a recent speech, highlighting its critical function in protecting Uganda’s own manufacturing industry from the inflow of imported goods.
In his statements concerning the recent strike of traders over heavy taxes, the President emphasised the protective characteristics of these levies and positioned them as an essential instrument in fostering domestic businesses, citing the need to promote economic self-sufficiency and support local industries.
He noted that the goal of the government’s tariff policy is to level the playing field and lessen the competitive advantage of imported goods, with the ultimate goal of fostering the development and prosperity of manufacturing facilities in Uganda.
Gen Museveni’s position is a reflection of a larger policy intended to support indigenous manufacturing, build economic stability, and guarantee the country’s sustained development.
“Therefore, when we are talking about tax measures, the determinant factor is how to protect our Uganda-based manufacturing facilities from foreign products that are, sometimes, subsidized by the Governments of those Countries. Even if they are not subsidized, there are disadvantages of kutandika (starting). We must help them to take off by ensuring, through taxation, that ensawo zaffee (our pockets) ziziimba ewaffe, sikuziimba Bunayira yokka (build our Country and not build foreign lands only). Remember, free slave labour, built the USA and Western Europe. Our cheap raw materials are now continuing to build in other Countries. Tulitusa ddi okuseleebwa (until when shall we tolerate being cheated)?” he asked.
He added that there is the secondary but still important issue of making money. The number of factories that turn our raw materials into final goods and give young people jobs is increasing, which means the tax base will grow. With this growth, the government will be able to collect money from other sources, including income tax, sales tax, income excise duty, rental tax, and more.
“Most importantly, our traders should be aware of the fact that it is not good for them to be agents of foreign interests at the expense of the interests of their own Country. Getting little money while the foreign countries get much more money out of our natural resources; Losing jobs to the foreign countries, that buy our raw materials; Losing taxes to those foreign countries that, then, give us donations with conditionalities,” he said.
The local market
In their engagement with the traders, Gen Museveni noted that traders informed them that they desired to make Uganda an East African hub, however, Gen Museveni has refuted it alluding that Uganda is an extremely gifted country which can never be compared to Dubai or China.
“Uganda is totally different. Dubai did not have the raw materials base we have. Therefore, they did what they could – initially distribute what others have processed and, eventually, attract some of the processors to base their operations in Dubai but using imported raw materials. Uganda is doing and can do much more than that. It is processing our raw materials into finished products, and selling them in Uganda, the region and beyond….” he added.
He highlighted initial successes like the Mukwano soaps and cooking oil using Uganda’s vegetable oils (sim-sim, sunflower), the Palm oil project, the Dairy sector, the gold Refineries, the textile sector (Nytil, Fine-spinners, Mbale Industrial Park, etc.), the furniture Industry. “Why should Uganda buy furniture wood products or leather products from anywhere else? It is a betrayal. Uganda is not a Dubai, is not a South Korea, is not a Japan, is not a UK. This is because it has almost everything needed to become a global Industrial powerhouse which was not the case with the Countries quoted above.”
Gen Museveni asserts that Uganda is unique and nothing will stop it from being a global industrial powerhouse with the NRM in charge. “I can only call it a mini-USA, because, indeed, that Country overtook the other global powers of that time (UK, France, Germany, Holland, Portugal, Spain, etc.) because it had almost everything within its borders.”
He even warned that Ugandan traders can raise their concerns but be careful not to make themselves obstacles in the path of the Uganda of today and tomorrow, which is a strong Uganda.
He added; “There is something that I should not forget that may also be unique to Uganda. This is the culture of Wealth creation (okwombeka) that is indigenous to Uganda (ey’obujajja – part of our heritage). Look at the coffee, the Ankole long-horn cattle, the zebu cattle, the bananas, the millet, the sorghum, the malikwang, the lake and river fish (engege, Empuuta, Mukene), enshoonzi (mud-fish), the forests, the emyooga (black-smithing, woodwork etc.), etc., that are all indigenous to Uganda and can be turned into great wealth.”
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