masabahouse (masabahouse) wrote,

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E.African economies raise spending, risks seen

Maria Kiwanuka, the Ugandan finance minister proposed to raise taxes on people who earn more than 120 million shillings a year, while raising withholding tax for investment on government securities to 20 percent from 15 percent.

Traders said the move would put off foreign investors, a key source of hard currency for Africa's largest coffee exporter that keeps the shilling from weakening steeply against the dollar, thus raising costs of imports.

"The new measure of escalating the tax on Treasury bonds and bills is ill-advised because it will hurt offshore investors who have been very crucial in supporting the shilling," said Faisal Bukenya, head of market making at Barclays Uganda.

Tags: budget, east africa, growth, money
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