Minimum wage and taxation are key problems derailing the economy, says Museveni

KAMPALA- President Yoweri Museveni said on Wednesday that in order to fix Uganda’s economy, the key challenges of high corporation taxes, agreeing on the minimum wage and high cost of finance (interest rates), must be resolved.

 “I think these are the three remaining issues. At least I have got the money for my roads, electricity, education health, agriculture for the army and we are working with the Chinese which will solve the problem of ICT under cable and the railways. But there are still problem of minimum wage, high corporation tax for production and high cost of money (high interest rates),” he said.

President who was speaking at celebrations to mark the Golden Jubilee of Bank of Uganda at Kampala Serena Hotel said the above challenges are still impacting on the economy negatively.

He explained that the policy of having minimum wage in Uganda needs to be harmonised.

“Other people are talking of high wages other people want low wages, which one is which,” he asked?

Uganda is one the few countries with no minimum wage policy.

 Mr Museveni asked Dr Kisamba Mugerwa, the chairperson of the National Planning Authority to come up with the minimum wage policy.

On taxation, Mr Museveni said the tax policy especially in production is high singling out VAT and the Corporation tax of 30 per cent.

With regards to the prevailing high interest rates, Mr Museveni said Uganda is facing a the  problem of cost of lending money  because the rates are very and the banks are well regulated.

On other policies concerning the economy, Mr Museveni said the International Monetary Fund (IMF) wants to “advise all other people but they don’t want other people to advise them.”

The IMF, he said is so concerned with the stabilisation of macroeconomic and financial systems.

“Controlling inflation without controlling the fiscal policy will not solve the problem. We still have the problem of infrastructure like the energy sector,” he said.

However, in an interview with Daily Monitor the IMF resident representative in Uganda Ms Mira Clara said the IMF listens to everybody.

“The president is a bit disappointed because at one time he wanted to advise the board of IMF. At the IMF, things don’t work like that. We have executive directors and the managing director who have to handle such issues before going to the board of governors, Ms Clara said.