CPA Silajji Kanyesigye Baguma, Managing Partner at RKA & Co.
Uganda’s business community is bracing itself for a potentially devastating blow, as a proposed fuel tax hike threatens to increase production costs and undermine economic stability. With inflation already a concern, the additional burden of higher fuel costs could have far-reaching consequences for businesses and consumers alike.
“This is a perfect storm of challenges for businesses in Uganda, and the fuel tax hike is only adding to the uncertainty,” said CPA Silajji Kanyesigye Baguma, Managing Partner at RKA & Co.
The proposed fuel tax hike is expected to increase production costs, leading to higher prices for goods and services. This could exacerbate inflationary pressures and dampen consumer spending. “Businesses will have to pass on the additional costs to consumers, which could lead to a decrease in demand and ultimately affect their bottom line,” said Baguma.
To mitigate the effects of the fuel tax hike, businesses need to be proactive. “They need to reevaluate their production processes, streamline operations, and explore alternative energy sources where feasible,” said Baguma. Strategic staff reductions may also be necessary to contain labor costs without compromising operational efficiency.
Government intervention is also crucial. “Tax incentives aimed at reducing the tax burden on businesses can stimulate investment and spur economic growth,” said Baguma. Additionally, facilitating access to affordable financing for local manufacturers can help alleviate the strain of increased capital costs.
Alternative Dispute Resolution (ADR) is also key in resolving tax disputes efficiently. “ADR facilitates dialogue and collaboration between taxpayers and tax authorities, fostering a deeper understanding of each other’s perspectives and business operational needs to remain competitive,” said Baguma.
By working together, businesses and government can navigate these challenging times and emerge stronger and more resilient. “Together, we can build a more sustainable and prosperous future for Uganda,” said Baguma.
