Minister of Trade, Industry and Cooperatives Sanjay Tanna has pledged to engage manufacturers and review concerns over proposed tax measures, assuring investors that government remains open to dialogue ahead of the new financial year.
Tanna made the remarks during a meeting hosted by the State House Investors Protection Unit (SHIPU), where manufacturers raised concerns about taxes they say could increase production costs and affect business competitiveness.
“To the Ambience Group, I promise you that we are going to resolve it. The mandate given to me is specifically to resolve these issues,” Tanna said.
The minister acknowledged that several sectors, including sugar and steel manufacturing, are facing challenges requiring government intervention.
“We must acknowledge that there are issues in many industries. There are issues in the sugar sector, there are issues in the steel sector,” he said.
Tanna, however, noted that Uganda’s industrial sector has made significant progress over the years, arguing that current challenges are largely linked to managing growth, profitability and competitiveness rather than shortages that characterized earlier decades.
“The problem we have today is managing manufacturers who are now producing steel and other goods. It is about managing profitability in each industry,” he said.
He also addressed concerns over environmental regulations affecting plastics and timber industries, saying government must strike a balance between environmental protection and investment promotion.
“It is obvious that we must protect the environment, but in doing so you can end up killing an investor. It is about finding a win-win situation,” Tanna said.
The minister assured manufacturers that his office would maintain an open-door policy and continue engaging stakeholders on policy issues affecting their businesses.
“We must dialogue and see how we solve these problems,” he said.
Earlier, manufacturers represented by the Uganda Manufacturers Association (UMA) warned that some proposed tax measures could increase the cost of doing business and ultimately be passed on to consumers.
UMA Board Member Stephen Kalibbala questioned proposals that would significantly increase taxes on certain products, including plastics.
“Does moving tax from 2.5 per cent to 25 per cent enable business? If you give such a tax, unfortunately the cost goes to the consumer because I also have to make do in my factory,” Kalibbala said.
He urged government to consider industry concerns before the start of the new financial year, saying manufacturers had already submitted detailed proposals to the Ministry of Finance and other government agencies.
Kalibbala also argued that government should focus on expanding the tax base by formalising more businesses instead of placing additional burdens on the formal sector.
“The informal sector is about 70 per cent, but all these taxes are hitting those of us in the formal sector. The debate should be how to formalise the informal sector,” he said.
Speaking at the same meeting, the Head of the State House Investors Protection Unit, Col. Edith Nakalema, called for continued engagement between government and the private sector, saying consultation was essential to maintaining investor confidence and supporting economic growth.