Henry Okello Oryem, the State Minister for Foreign Affairs in Charge of International Corporation has assured investors from India that they will repatriate 100% of their profits if they choose to invest in Uganda.
Oryem said government has fully liberalized all sectors of the economy for investments, “and foreign investors are allowed to own 100% shares of their companies.”
“Additionally, we have liberalized the foreign exchange regime which enables investors to repatriate all the profits,” he said.
The idea of investors repatriating all their profits has since divided public opinion, with economists warning that unregulated capital flights tantamount to haemorrhage of scarce resource to an economically struggling country.
On top of allowing massive capital flight, government also doles out vast tax holidays to investors.
According to documents tabled before the parliamentary budget committee in May 2017, government was required in Financial Year 2016/17 to spend Shs77bn to pay taxes for BIDCO Oil Refineries Ltd; Aya Investments Ltd; Steel and Tube; Cipla Quality Chemicals; Uganda Electricity Generation Company Ltd; and Uganda Electricity Transmission Company Ltd.
Government is yet to present convincing evidence of the benefits that such holidays, incentives, exemptions accrues to the economy.
“We still maintain that tax incentives, exemptions and/or holidays that outstrip their benefits are harmful to the economy. As a result, the treasury has been drained of critical revenues that would have been useful in other sectors of the economy such as Trade, Water and Environment, not to mention Education,” said Nelly Mugisha, Programme Officer, Financing for Development/Tax Justice, in a recent article.
Defending the 100% profit repatriation incentive, Minister Oryem said Ugandans should work hard and out-compete foreign investors instead of lamenting that they (foreign investors) are kicking them out of business.
“Why would you want us to hold people’s hard-earned money? It’s your profit, your money, take it. This will encourage several investors to come here. You should know that we are not exceptional, there are many countries we are competing with,” he said.
Oryem made these remarks while officiating at the virtual Uganda-Indian Investment Road show at the Ministry Headquarters today, Thursday September 16.
The Road show was organised by the Uganda Embassy in India from Jarpur City.
“Once you set up a business in Uganda, you will be able to reach a bigger market,” Oryem told the Indians.
“We are building a modern, people-centred independent, integrated, resilient partnership to sustain the economy. Our focus is on industrialization as guided by NDP III which aims at increasing household income and improving the quality of life in Uganda,” he said.
Oryem noted that the ministry is prioritizing commercial and economic diplomacy in their work because they believe this new focus will lead to socio-economic transformation and deepen relations with India.
“We hope to transform livelihoods of people through better incomes and better employment as well as strengthening the country and region’s competitiveness in the international economic arena as we believe that a prosperous people provide a bigger market for investments,” he said.
He said Uganda currently exports goods worth $1.2Bn to India, “and this figure can be increased.”