Presentation by John Walugembe, Executive Director, Federation of Small & Medium-sized Enterprises (FSME) – Uganda at the Conference on Reshaping the tax system to support the Financial Sector Development Strategy (FSDS) Kampala, Uganda, 14th–15th December 2022 The two-day conference was convened by Uganda's Ministry of Finance, Planning and Economic Development, and co-hosted by ICTD's DIGITAX Research Programme and TaxDev.

2. 2
Inputs
(Labor and capital)
Reaching minimum scale
Uganda’s current
situation in key
sectors, due to
binding
constraints
Reaching optimal scale
• Decreasing returns for each
additional unit of labor and capital
• Increasing macroeconomic
challenges (demographics,
environment,
infrastructure)
→ Rising cost of growth
“More” path
→ More labor
and capital
Need to move to
new growth path
A transformed
Ugandan society
from a peasant to a
modern and
prosperous country
within 30 yrs
Innovation-knowledgeable
& skilled work force
The Context and Future - The
Vision 2040

3. The Ugandan MSME Definition
Micro
Small
Medium
No.ofEmployees
< 1 < 4
&
< 5 < 50
&
< 50 < 400
&
Turn-over
< = 1m < 12 million
&
< 12m < 100 million
&
< =100 < 360 million
&
Asset Base
< 1 < = 12 million
&
< 12m < 100 million
&
< 100 < 360 million
&
According to the Uganda Bureau of Statistics:
MSMEs count for over 90% of the total enterprise population Uganda
MSMEs employ over 8.5 million people of Uganda’s workforce
MSMEs contribute to over 75% of Uganda’s GDP

4. 4
Our Vision, Mission & Mandate
Conducive business
environment
Entrepreneurship,
Entrepreneur
Development & Job
creation
Advocate
Deliver BDS
Recruit,
Reintegrate
& Retain
To enhance the development
and competitiveness of MSMEs
in Uganda through quality
services delivery and advocacy
Mission
To be the leading
organization in the
promotion and
development of
MSMEs in Uganda
Vision
Mandate
Policy Advocacy
Business
Development
Services

5. Key Gaps in the SME Support Ecosystem
Although, improvements could be made at all levels of the MSME support
ecosystem, a few of these aspects require a higher focus
Entrepreneur
Mentors/
Advisors
Equity
Investors
Government
Programs
Banks
Infrastructure
Lobbies & Entrepreneurial
Organizations
Personal Enablers
Financial Enablers
Business Enablers
Environment Enablers

6. Major Risks faced by MSMEs

7. Insurance Uptake

8. Uptake of Insurance among
MSMEs

9. Types of Informal Insurance
Types of Informal Insurance VSLAs
Burial Society Membership
Community Health Insurance

10. Who are the uninsured
 Rural-73%
 Female-52%
 Young-62% under 36
 Uneducated-70% completed primary school
 Reliant on irregular sources of income

11.  Formal Insurance uptake is low
 Low Awareness-74%
 High cost of insurance-due to high cost of
distribution
 Difficult to obtain and complex to use
 Lack of trust

12. Comments on Al Hajji Kaddunabbi
 21B in stamp duty revenues, 10.4Bn in VAT
revenues, 58B in Premiums-Need to be
studied further from the perspective of Cost
of Doing Business-Do not support/yet
 Insurance of commercial building (Fire/Public
Liability)- Higher rent for MSMEs-Not sure
 Waive taxes on savings based insurance
products-Support
 Waive stamp duty & VAT on Insurance
Policies-Not sure

13. ANY QUESTIONS?
THANK YOU