The Deputy Speaker of Parliament, Thomas Tayebwa has commended organisations excelling in financial reporting, saying it is a sure way of sustaining businesses and widening the tax base.
Tayebwa who was officiating at the Financial Reporting (FiRe) Awards at the Kampala Serena Hotel on Thursday, 01 November 2023, said the economy is sustained by a few companies which are tax compliant leaving the country with a heavy debt burden.
The FiRe Awards are an annual event organised by the Institute of Certified Public Accountants of Uganda, Capital Markets Authority and the Uganda Securities Exchange to award public and private sector entities and Not-for-profit organisations that are excelling in financial reporting.
“We know the burdens you do have; we have focused on a small group of companies that are disciplined to tax them heavily, if there is compliance in business I am sure we shall expand our tax base and lighten the burden on you,” said Tayebwa.
The Deputy Speaker added: “this will help us reduce on borrowing. As a country our gross domestic product [GDP] tax ratio is 13 .8 percent and our calculation is that If we can expand our GDP tax ratio to 19 percent, then we will be able to bring in extra Shs 10 trillion that will help us to focus more on critical items”.
He tipped the guests that government is willing to support different companies with tax incentives only if they can demonstrate good financial ethics.
“I have been engaged with companies which request for reduction in tax. Those in beverages say, ‘reduce our excise duty from 12 to 10 percent, and we shall be able to improve our sales by this margin, employ more people and remit more tax revenue.’ But how does government ensure that indeed such was achieved when the majority in the sector are not tax compliant?” he asked.
Tayebwa expressed concern that a large fraction of the national budget was being spent on servicing debts, and commended the FiRe Awards as a platform being used to rally more business players into the tax base.
“Out of a budget of around Shs 52 trillion, I do find that I have 18 trillion as discretional budget and the rest is on debt repayment, and the only way we can get rid of this dilemma is ensuring we have discipline in clear financial reporting, which will widen the tax base so that we even reduce the burden we put on you,” he said.
The chairperson of the FiRe Awards committee, Stephen Ineget, said winners are awarded not only on the basis of ethical financial reporting, but also on how they incorporate good governance practices, environmental aspects and social aspects such as gender equity.
“The environmental aspect deals with an organisation’s impact on the planet, the social aspect deals with the impact an organisation has on its people and governance considers best practices of governance which ensure transparency and accountability,” Ineget said.
Distributed by APO Group on behalf of Parliament of the Republic of Uganda.