By KT Reporter
Experts at the Economic Policy Research Centre (EPRC) have expressed the need for a mechanism to consolidate the various levies charged on businesses into a single annual payment to ease compliance. This recommendation follows findings from the quarterly Uganda Business Climate Index, which highlighted a high perception of multiple taxation among business managers.
Speaking at a press conference on Tuesday, where the Centre released results for the January to March quarter, Dr. Brian Sserunjogi, a Senior Research Fellow at EPRC, said concerns over multiple taxation had increased by 5.2 index points—from 72 in the October to December quarter to 77.2 in March.
The quarterly index, which measures business perceptions among 1,152 formal enterprises nationwide, offers critical insights into the operating environment for Micro, Small, and Medium Enterprises (MSMEs).
According to Sserunjogi, responses revealed that many business owners struggle to differentiate between fees, taxes, and other levies, prompting a call for more awareness creation by responsible government agencies, including the Uganda Revenue Authority, local governments, and the Ministry of Finance.
The researchers surveyed three key sectors: manufacturing, agriculture, and services. Overall, the report reveals a slight decline in business sentiment, with the index falling from 91.1 to 88.8 between October–December 2024 and January–March 2025. According to EPRC, the dip is attributed to reduced business activity, lower profitability, and declining capacity utilisation.
More specifically, the results show that manufacturing improved by 4.8 points, from 76.9 to 81.6, driven by large firms in the soft drinks, cement, and pharmaceutical sectors. In contrast, agriculture declined by 4 points due to labour shortages and reduced activity in the tea, milk, and agri-input industries. In the services sector, the index dropped by 1.2 points, with real estate, forex, entertainment, and cargo businesses experiencing the most strain.
Commenting on the findings, EPRC Executive Director Sarah Ssewanyana noted that while there was a dip in the first quarter, there is optimism that conditions will improve in the next quarter, citing signs of increasing business activity. However, researchers note that business managers remain concerned about informal competitors, who, without the burden of multiple levies and taxes, outcompete formal enterprises.
Additionally, Ssewanyana revealed that businesses cited unreliable power supply as a major concern, particularly regarding distribution challenges, despite significant electricity generation capacity.
She urged the government to invest in reliable power distribution to support profitability and boost business confidence-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
