President Museveni has described it as suicidal and a big blunder for the country to extend tax waivers and subsidies to imported goods as part of the solution for the skyrocketing commodity prices.
Since February, the level of inflation has persistently shot up, sending the country into a great panic.
Speaking during the televised presidential address on the current economic status of the nation at State House this evening, Museveni said that removing taxes and subsidizing imports will lead a country into an economic catastrophe which will lead to its collapse.
“Some of the ideas people think about when confronted by high prices are subsiding. With imported commodities, this is a recipe for disaster. It will lead to the collapse of the economy. This problem of the high fuel prices is sucking money from the pockets of individuals and sucking more dollars from our national reserve. With the Great Lakes, there’s another problem of smuggling. When a product is cheap, it’s an incentive for smugglers to buy cheaply in Uganda and sell expensively in other countries,” he said
“Cheaper fuel in Uganda would seriously encroach on our reserves, and the removal of taxes would cause a tax loss to our government. How then would we get money for the roads? This is suicidal and a blunder,”
According to President Museveni, the wise way is to use these imported commodities frugally or to look for alternatives if they are there, and “secondly, to use our raw materials like a sunflower for soap as we wait for the extended palm oil production,”
“For bread, we can use banana and cassava flour. Millet is the only cereal with protein, carbohydrates, and iron. For many years now. I don’t eat bread. I eat cowpeas, bananas, millet, beef, and groundnuts. I made 78 years in September 2021 and I have been well. The only convenience we found in bread was in storage & transportation,” he said
The price of fuel, he said was going up even before the war in Ukraine because of the new clean energies movement, yet these would take time to be available. The Russia-Ukraine war has made this worse.
“Let us not be diverted, we are self-sufficient in food; maize, milk, beef, etc. This is the most important factor for survival. Other countries are doing bad, I hear they depend on wheat from some other places. Even with high commodity prices, we are doing much better than other countries, our inflation is at 4.9%,”
President Museveni reminded Ugandans that the country’s total reserve is $4.5 Billion which he said has grown from $3 Billion and is enough to only support imports for 4.2 months only in normal circumstances.
Museveni went to slam a section of Ugandans whom he said don’t believe in God this spreading negative predictions.
“As usual, those who don’t believe in God and themselves started panicking and predicting doom, but we, the NRM fraternity that God has enabled to handle bigger wars, are sure that any of these challenges can be rationally handled.
Where are the locusts? Where are the floating islands? Of all these problems, the COVID-19 was the most challenging,” he said
“We in the NRM believe we can solve any problem fairly. We always fight justly. The problem of high commodity prices is easier to deal with, and it’s not new. The problem of the skyrocketing prices of commodities can be solved with the existing knowledge but rightly applied. The reason why we have too many surpluses with no internal market is that we handled the problem of shortages well in 1986,” he added.
On local products, Museveni said that after the Cabinet meeting he realized that his opinion of waiving taxes on them would cause suffering which he didn’t know.
“Removal of taxes will make the country lose taxes like Shs193 billion on sugar, Shs200 Billion on Cement, and Shs120 Billion on Steel Bar. This alone means that we shall lose half a trillion,” he said
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