UGANDAN GOVERNMENT PROPOSES NEW TAXES
The Ugandan government, in its four
year investment and development plan, proposed taxing land and
food crops in an attempt to broaden its revenue base away from
dependence on coffee sales.
    The government also said in the plan, made available to
Reuters, that a devaluation of the Ugandan shilling would do
little to redress a chronic balance of payments deficit.
    The plan, the first since President Yoweri Museveni took
power 15 months ago, seeks to raise 2.4 billion dlrs in
investment funds from abroad between 1987 and 1991.
    It says the government had already secured 1.4 billion dlrs
in pledges before Islamic lenders promised a further 494 mln
dlrs at a conference in Kampala last week.
    Uganda already had an external debt of 984 mln dlrs at the
end of 1986 and in the nine months of the current budget debt
servicing will cost 204 mln dlrs, almost 50 pct of export
earnings of 431 mln, the plan said.
    The new fiscal measures include a proposed tax on large
land holdings, regardless of whether the owners are exploiting
them, and taxes on maize, beans and other crops sold by the
Produce Marketing Board.
    The plan says the aim is to spread the tax burden, which in
Uganda has traditionally fallen almost exclusively on coffee
farmers. Coffee provides over 90 pct of foreign exchange
earnings and more than 70 pct of government revenue.
    On exchange rate policy, it repeats Museveni's argument
that any form of fotation would not help allocating resources.
    Western governments and multilateral funds say the Ugandan
shilling is grossly overvalued and the government must change
the exchange rate if it wishes to encourage investment. The
shilling sells on the black market at more than 15,000 to the
dollar, compared with an official rate of 1,400.
 REUTER
