Bil­lions lost in busi­ness li­cens­ing: World Bank

The Pak Banker - - Company& -

KAM­PALA: Uganda loses at least Shs394 bil­lion in col­lect­ing li­cense fees from start­ing busi­nesses in the coun­try, a new World Bank study shows. "Our study in­di­cates that Uganda's li­cens­ing regime costs $175 mil­lion per year, which rep­re­sents 1.3 per cent of the Gross Do­mes­tic Prod­uct," Mr Fred Zake, an in­vest­ment cli­mate ex­pert at the World Bank Group told jour­nal­ists in Kam­pala.

Uganda's GDP, put sim­ply as the an­nual na­tional in­come from the sale of goods and ser­vices, is about $16 bil­lion (Shs36 tril­lion) - five times the cur­rent na­tional bud­get.

Mr Zake said a third of the money is lost as govern­ment agen­cies at­tempt to col­lect li­cense fees from the is­suance of at least 267 au­tho­ri­sa­tions and li­censes to in­vestors in the coun­try. The nu­mer­ous li­censes form part of the core prob­lems of do­ing busi­ness in Uganda in­clud­ing; cor­rup­tion, high en­ergy and trans­port costs.

As a re­sult, Uganda has con­tin­ued to rank poorly on the global do­ing busi­ness in­dex com­pared to na­tions like New Zealand and Singapore. The 2011 Do­ing Busi­ness Re­port by the World Bank ranked Uganda in the 122 po­si­tion out of 181 coun­tries and yet that is an im­prove­ment from the 129th po­si­tion in 2009.

To im­prove the in­vest­ment cli­mate and cut­back on the cost of li­cens­ing, the govern­ment in part­ner­ship with the World Bank have teamed up un­der the newly launched In­vest­ment Re­form Pro­gramme. Mr Zake said through the progamme, the part­ners are set to cut back on costs of li­cens­ing by about Shs100 bil­lion. "We are go­ing to cost all these li­censes, and the cost of li­cens­ing will re­duce by 25 per cent," he said. Un­der the four-year pro­gramme the Min­istry of Fi­nance will pur­sue ma­jor re­forms in the tax­a­tion and li­cens­ing regimes of the coun­try. -PB News

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