In her budget speech, Finance Minister Maria Kiwanuka said 81 per cent of it would be funded from domestic revenue, which only follows that Ugandan taxpayers – especially businesses – should gear up in preparation for a new, more stringent taxregime.

But before I address the plight of businesses, a word for the government: while the minister proposed to increase funding to corruption-fighting agencies, I think it is high time the government took a more proactive approach to fighting corruption at the source, as opposed to the audits done at the end of the year, which are a kind of post-mortem and do not really solve the problem.

I would like to see the government engaging professional service firms to assess the internal control mechanisms in its departments. For while these controls are mostly active, they are often circumvented. The government needs to get assurance well at the beginning of the year that these institutions receiving money have adequate control mechanisms in place to prevent fraud.

Back to businesses, the removal of VAT-exemption from hotel accommodation might mean that they will need more funding to cater for this VAT that they are going to pay. One way to mitigate this risk is to register for VAT so that they can claim any VAT that they are charged at hotels.

They could also engage their donors to increase funding due to this anticipated increase in hotel accommodation costs. They could also use cheaper hotels so that they can fit into the budgets that they had approved for the year in regards to hotel accommodation.

The increase in excise duty on petrol and diesel could lead to a general higher cost of doing business as this affects transport costs which affect every sector of the economy. This could be mitigated by businesses increasing the prices of their products so as to cater for the increased fuel costs. However, this is only for goods with inelastic demand.

The minister proposed to expand the range of withholding agents, which will mean that a business will have more people withholding from their payments and thus affecting their bottom line. This could be mitigated by registering the business for tax purposes so that it can claim this withheld tax while filing their final corporation tax returns.

This is because most start-up businesses have access to many capital allowances which could put them in a non-tax paying position though they could never know without computing the tax liability.

The minister also proposed to provide a legal framework allowing URA to collaborate with URSB, local governments and KCCA to identify taxpayers and collect taxes on small businesses which are hard to reach by URA.

This can easily be mitigated by local business owners engaging professional accountants to compute their profits and tax thereon and register their business so that they do not end up paying more tax than required. The tax accountants can also advise the business on better ways to structure their business so as to minimize their tax liability.

However, whereas the government is commended for putting in place various measures to ease doing business, there is a general outcry that not much is being done for indigenous business owners who are faced with many fees during the start and at the time when they are still looking for clients so as to break even.

This, coupled with other costs like rent, salaries and electricity, have forced many good businesses to close shop within a few years of incorporation. We can only hope and pray that the government can come up with some ways to encourage job creation through, for example, tax exemptions and reduction of licence fees.

The author is a financial analyst with Umeme.