Starting March of 2013, the Uganda Revenue Authority in partnership with the Ministry of Finance will have the prerogative of conducting licensing and permit-procurement tasks online.
The government is on the final stretch of introducing its first unified e-licensing facility that will act as a portal for domestic entrepreneurs, ranging from drivers, shop proprietors, educational institutions and the hotelier sector’s stakeholders to get their legal papers before setting out to do business.
This comes amid allegations of a murky licensing sector where a single business, especially in the service industry, often accumulates quadruple permits, one from the state-level, another from the town council and two more from other local administrators.
“Businesses are spending more on compliance with the law than in running the enterprise.” This is according to Winfred Kiryabwore, a Treasury official speaking about the launch of the new service.
A closer Look at Licensing in Uganda
Courtesy of the most recent audit results, enterprises in the East African nation churn out an upward of USh725.73 billion, annually, which is a 3.49-percent proportion of the Gross Domestic Product, to register their businesses. They also acquire a plethora of permits to run the same, a reason that is to blame for low returns and consequential lack of employment slots.
One of the more important licenses that locals have to come to terms with is a learner’s driving license. Applicants usually have to remit USh50000 as Transaction Fee, for the year, besides USh6000 for Form Fees, with face charges coming to USh20. A foreign driving permit renewal for the year, on the other hand, comes at a provisional Transaction Fee base of USh40000, which will also attract the usual Form Fee of Ush6000 and the additional Face Fee charges of USh20.
The other areas of licensing that see many companies grapple with each year, include that of clearance agents’ fees. Lack of remittance early this year created a backlog at the Malaba transit point with Kenya after the Ugandan agents failed to implement their part of the bargain as a result of registration difficulties.
In Uganda, the government at Kampala, in tandem with all local authorities combined, offers an aggregate of seven hundred and eighty permits. Of these, 554 come from Kampala, while the 226 remaining are from the respective town councils that the locals or foreign applicants go to.
Total licenses per year: 780
With the new system in place, however, the administrative price of availing these documents, on the part of entrepreneurs, will go a notch lower from the current 43 percent of the gross licensing charges, according to a Treasury official.