#OutToLunch VAT should be paid after cash received policy should be extend to all sectors

By Denis Jjuuko

There is a story that didn’t make newspaper headlines or even trend online but very crucial for small and medium enterprises or as we have learnt over the last few weeks even for ‘big’ businessmen. The story, published by Daily Monitor in its business pages reads that “goods (and I believe services) supplied to government will, beginning July 1, not be subjected to value added tax (VAT) before their invoices are cashed.” It added that “the policy shift is contained in the new tax amendments 2022 that were passed by Parliament but still awaiting to be signed by the president.” I hope the president doesn’t even take a day to sign this into law.

I am not sure why this didn’t make the main headline or at least be on the front page but as somebody who has never edited any newspaper, I would certainly never know. The way VAT has been collected is prohibitive and deters growth for especially SMEs which are the heartbeat of the economy, any economy anywhere in the world.

Currently, the Uganda Revenue Authority expects you to pay VAT at the point of delivery, invoicing or payment. This has been problematic for SMEs because you have been expected to pay money you aren’t sure you will ever receive. Usually, upon signing of a contract or receiving the purchase order, government expects you to deliver and then invoice even though there are some cases where a certain small percentage is processed upon signing the contract or receiving the purchase order. In many cases, even where a percentage is paid, it isn’t enough to deliver the goods or services.

So in order to deliver on your side of the contract, you approach the bank or informal money lender for a loan at huge interest after which you start the protracted game of chasing payment from government. The promised working days before your payment is processed can turn into months and sometimes years. But within 15 days of invoicing, URA has been expecting you to pay failure of which they would institute penalties. So as a businessman who is already in debt, you take on more debt to pay URA the VAT. This can easily make you a bad debtor and have your assets advertised for auction.

The move to demand VAT after somebody has been paid is a good move. One doesn’t have to take on unsustainable debt to pay VAT to avoid penalties or even closure of your account. Money can be paid whenever government pays. At least this doesn’t tie up capital to do some other work as one waits for government payment. Though for many smaller businesses, the tax amendments would have made more sense if the amended law included other businesses.

Although the issue of delayed payments is more rampant with government, it is also endemic in non-government organisations and the private sector. Many times, people who are supposed to pay don’t do anything to ensure suppliers are paid on time even when for the case of NGOs money is idly lying on their account. It could be due to lack of understanding and appreciating the pressures in the private sector or simply a bureaucratic system.

Many times paper invoices are deliberately misplaced or supporting documents are kept away. An officer goes on leave or decides to attend a workshop for weeks without assigning anyone else to handle their work thereby further delaying payments. This is one of the reasons government owes suppliers an estimated Shs2 trillion some of which hasn’t been paid in five years. Imagine as a small and medium enterprise having your invoices unpaid for five years!

Litigation is costly for SMEs and it can also take many years as the case is assigned one judge after another who keep on adjourning it for extended period of time. As a businessperson, you sometimes return to prayer or unsustainable debt which curtails growth. Employees will be affected, businesses will close. Government would lose revenue.

Now that the issue of when VAT is paid when supplying government is sorted pending the president’s signature, the issue of the 18% need to be worked on as well. In Kenya, VAT is 16%, in South Africa it is at 15% while in Ghana 12.5% and 7.5% in Nigeria. A reduction in the rate in Uganda would also help boost business and incomes especially given the ongoing economic disruptions.

The writer is a communication and visibility consultant. djjuuko@gmail.com

Tags: Denis Jjjuuko, Out to Lunch, URA

Out to Lunch

#OutToLunch: Some of the big bets for 2026

By Denis Jjuuko It was just the other day when many people were making resolutions for 2025. Days turned into weeks, months and now a whole year. You blink, and it is a new year. I hope that you managed to achieve those targets you set for 2025. If you didn’t, well, you can still list them for 2026 and work on the issues that made you fail to achieve them. Well, there are so many things that are happening in 2026. An election is upon us and it comes fast—starting on 15 January. I hope that your candidate wins and most importantly that they do what they are promising to do. In the meantime, I thought of a few things that could be important in 2026. They could be business ideas or stuff that may make your life better one day. Generators, power back up As I was writing this, a close friend called me and she sounded desperate. Her electricity had failed and she was worried about spending yet another night in darkness. She had bought an inverter but because of a prolonged power shutdown in her residence area, her batteries were drained. She fears darkness. So, she thought I could be a plug for a standby generator for a night. We made frantic phone calls but many people with generators for hire had closed for the night. Anyway, it reminded me of a visit I made a few months ago to a friend’s home. I found people installing a generator. My friend had rightly predicted that the transition from one electricity distributor to another wouldn’t be that smooth and had envisaged the return to darkness. I had thought that he was panicking. He wasn’t. The new distributor has told us that electricity will stabilize in a few years. So, in 2026, either get a standby generator for your home or business or start dealing in them. Water harvesting When electricity fails, the guys at Katosi and Gaba inform us that they can’t pump water from Lake Victoria. This means that the taps soon run dry. When we were younger, we used to ask ourselves a silly question. What would should we rather have? Running water or electricity? We thought we had left those days more than 20 years ago. And it seems the question wasn’t even silly after all. So, what would you rather have in 2026? Water or electricity? Well, in 2026, either get a water tank for rain harvesting or start dealing in them. Car parts The smart guys at the Ministry of Works and Transport have declared a mandatory vehicle inspection at your cost. Not a bad thing if it would make our roads safer. But if you live in some of these parts of Kampala, most likely your car won’t pass the test. If it does, it will not be in a good shape a few days later. Some of the roads in Kampala have the biggest potholes ever seen in the world. If you drive a car that was once owned by somebody in Asia or Europe or north America and got rid of it by selling it to you, be prepared for a new suspension every few weeks. You may also have to budget for a bumper in 2026. If you live in a neighborhood with a paved road and potholes aren’t your problems, well, still budget for some body parts. However much you rivet your car, guys will still pluck off stuff in traffic jam or they will scale your fence and “undress” your car. So, in 2026, plan for car spare parts or start dealing in them. Coffee and gold Coffee and gold are most likely going to continue being top forex earners for Uganda in 2026. You may have to look for ways to get involved. Gold, though, has expensive school fees, so invest with care. Coffee, some call it the green gold, is a bit easy. Entry fees are not so exorbitant and many people have knowledge of how to grow it, trade it or drink it. If growing it is where you want to start, think of some bit of irrigation. Changes in the climate are real but also water in Uganda is easily available in many parts where coffee is grown. A few feet underground, and there is reliable water all year long. In 2026, find a way to deal in coffee, remember “it doesn’t lie” or even gold if you have the school fees. The writer is a communication and visibility consultant. djjuuko@gmail.com

January 22, 2026

Out to Lunch

#OutToLunch: How Uganda’s next president could easily reduce the housing deficit

By Denis Jjuuko It is not uncommon to find a social media post in Uganda regarding the price of land or property being shared many times. The argument is that land prices are extremely high especially around Kampala and in many major cities or towns across the country. With an ever-increasing population and poor infrastructure and services a few kilometres outside these major urban centres, it shouldn’t be entirely surprising that land is expensive. I have always given an example of Mpigi town, which is nearer to Kampala than Entebbe but a difficult place to commute due to poor infrastructure. Yet with the Entebbe expressway or even the old road, Entebbe is an easier place to access. So, land prices around Entebbe will always be high as not many people would make Mpigi their area of residence while working in Kampala. That though will change when the Kampala-Mpigi Expressway is complete. However, construction of infrastructure such as expressways in Uganda takes a very long time leading to people crowding around the urban areas where it is easier to commute to their workplaces and services such as hospitals and schools are better. This increases pressures on land for housing purposes in urban areas. And as the population grows, land, an inelastic resource becomes more expensive. Many young people end up struggling to build houses. With the current housing shortage said to be over 2.4 million units in Uganda, poor infrastructure and services and an ever increasing population, the price of land will only continue to rise unless the government does something. And that wouldn’t be nationalizing land like some people urge whenever there are delays in executing infrastructure projects or when the price of land is seen as a hindrance to young people owning houses. Government must realize that the most valuable asset the majority of Ugandans will ever own is a house. Once people own property, they wouldn’t want to create so much chaos that could lead to destruction. Empowering young people to own houses should therefore be in the government’s best interests. Since land in Uganda for housing is largely owned by private entities or communities who determine its cost without any guiding principles, government could create a land bank from which individuals could buy land or a house. How would this work? And since we are going to the polls next week, the country’s next president has his work well cut out. In urban areas like greater Kampala, government could buy large tracts of land in Mukono, Mpigi, Mityana and Luweero and demarcate it for planned housing estates similar with what private land dealers do but a bit better. Land would be divided into small pieces with architectural plans drawn by leading experts. Schools, recreation, and health facilities would be planned. The government would then sell the land at a rate lower than the private sector. Nobody would be allowed to deviate from the architectural plan. If you bought in an area with bungalow houses, you build the exact bungalow. If you bought in an area for storied villas, you build a storied villa as per the architectural plan. Each person or legally married couple would be allowed to buy only one plot and you can’t sell it to another person at any rate. If a buyer prefers to sell, he sells it back to the government at the price he bought it. This would protect the land from speculators who buy, hoard and then sell at an exorbitant price. Because the cost of building a house with a given architectural plan is easy to establish, banks would only rent a certain amount of money. Banks willing to lend the money would not give it to the individual as is usually the case, rather a prequalified construction company that can deliver the house within the established cost of building it with a capped interest rate or profit. This is how Islamic banking works and therefore not a novel idea that is difficult to implement. Should a person fail to pay, the government buys it from the bank at the set amount and then sells it to somebody else. People could pay in installments over a given period. Monthly deductions could be made to salaried workers such as civil servants interested. The government can then construct roads and expressways to those areas as many people would be living in these housing estates. Public transport, schools and health facilities would be prioritized. More young people would end up owning houses and therefore a huge stake in their country and ministry of urban planning would have something big to deliver. The price of land for housing would plummet too enabling more people to own houses. The writer is a communication and visibility consultant. djjuuko@gmail.com

January 20, 2026

Out to Lunch

#OutToLunch: Replicate innovation hubs in Kampala and refugee settlements across the country

By Denis Jjuuko Airpods in the ears. Hands busy with a smartphone. Shoulders holding a leather laptop carry bag. Legs covered in sagging pants. Torso well covered in a jumper with a hoodie. Hair spiked. Sunglasses on. It is a familiar sight at a building in Kampala where young people trying to replicate Silicon Valley converge to work on largely fintech applications. At least a floor in the building provides open spaces where these people work on their ideas while sipping iced coffees sold at a cafeteria in the corner. Walls are covered with inspiring graffiti of quotes by famous people or even bible verses. The young people are on a mission to make it big in the tech world. Those who find some breakthrough, which usually means nailing somebody willing to invest in their ideas or provide a grant, move to the office cubicles partitioned with glass, providing more inspiration to those still on the journey. These workspaces have many names. Incubation centres, ideation labs, entrepreneurial hubs, job centres. They are usually funded by development partners as a way of subsidizing the cost for these emerging entrepreneurs, developers, inventors, creators or whatever they prefer to call themselves. Perhaps having seen some impact in urban areas, these centres were replicated in many of Uganda’s refugee settlements across the country. At these centres, youthful refugees and host communities access high speed internet, get access to computers and sometimes machinery and tools that enable them to bring their ideas to life. The development partners sometimes throw in training like how to use multimedia platforms to market their businesses or find work. Small grants for groups with innovative ideas or even for those who are dedicated to their work are common. Access to high-speed internet has helped a few of them to create great products. On a visit to the Nakivale Refugee Settlement, I found an interesting group that makes guitars. They taught themselves via YouTube tutorials and they are able to market their shiny guitars to global customers through social media. They have been supported by Partnership for improving prospects for forcibly displaced persons and host communities (PROSPECTS), a project implemented by the International Labour Organization and funded by the Netherlands. It is remarkable what young people can do once they are enabled to innovate. Skilling is critical not just in vocational jobs. But also, in soft skills such as communication and digital marketing. How can they use WhatsApp Status, YouTube or TikTok to push their products out? How can they use YouTube to learn a new skill? I don’t think there is a vocational school that sets itself out there to teach making guitars but those refugees in Nakivale found a niche and made it work even though they have a long way to go. I have heard of people who taught themselves baking, weaving, and a few other things via YouTube tutorials and are now earning a living and even employing others. Once young people have access to affordable internet, many can teach themselves similar skills once they appreciate what they can do with a smartphone. Multimedia skilling programs for youth such as those offered by the Uganda Communications Commission (UCC) through Uganda Communications Universal Service and Access Fund (UCUSAF) are a good starting point. I have seen people learn making professional posters through platforms like Canva or videos using CapCut thereby joining the creator economy. I think there is a need to replicate the incubation hubs in Kampala and job centres in refugee settlements at subcounty level or even district level to start with. Here, young people would converge even if once a week to discuss with like-minded individuals, teach themselves skills and form partnerships and synergies that would enable them to scale their ideas or enterprises. Of course, regular trainings and mentorship would be important. They would be able to access high speed internet, computers or virtual reality gadgets. They would also test out their ideas and over time have access to those who may have been able to succeed. They would also provide markets to themselves. If one has mastered digital marketing, another involved in another industry would be able become their customer. We have also talked about value addition for a long time. Machinery is expensive. Knowledge is scarce. If people grow some coffee in Bukomansimbi or Budadiri and you want them to add value, a roastery can be installed at this hub where those interested can roast and package their coffee. As they grow, they would be able to scale on their own. If the hubs are somewhat working for youths in Kampala and refugee settlements, they can work too in rural communities. The writer is a communication and visibility consultant. djjuuko@gmail.com

January 20, 2026