Africa-Press – Uganda. Parliament has under the Foreign Exchange (Amendment) Bill, 2023 set a fresh legislation that requires all persons intending to set up and operate Forex Bureau outlets in Uganda to have a share capital of Shs200 million.
This therefore means that once the law is assented to by President Museveni, the previous position that required such persons to have a minimum of Shs50 million will be dislodged.
In a visibly pronounced defense to the said legislation, the State Minister for Finance in charge of general duties, Mr Henry Musasizi, told Parliament on Thursday that government intends to use the said law to harmonise the provisions with other member states in the East African Community (EAC).
Parliament’s Finance Committee chairperson, Mr Amos Kakunda, indicated that this would lessen or lock out on possibilities of money laundering in Uganda.
The vehement defense for the said provision came after the Finance shadow minister, Mr Muwanga Kivumbi, (Butambala County MP) attempted to push the House to create two provisions to cover local persons interested in the said trade and a different share capital amount for foreign owned forex bureaus.
“We have to be very careful [on] whether the law we enact does not eliminate the local participant in this trade,” Mr Kivumbi said and reasoned that Ministry of Finance officials had told the committee that forex bureau transactions conducted in Uganda account for 10 per cent of Uganda’s Gross Domestic Product over a period he did not define.
Mr Kivumbi therefore proposed the need for a provision in the said legislation, “to give our local people some advantage. We need to put it [minimum share capital] to Shs150 million as share capital for local people and Shs200 million for foreigners.”
Just before the government could respond, Speaker Anita Among wondered how the government’s implementing agencies would differentiate outlets owned locally and internationally. This would therefore complicate the process of enforcing the legislation.
“How will you know that when I go to a forex bureau, this one is operated by the local person and the other one by a foreigner?” Ms Among wondered, adding that; “let’s not create a scenario where we have people hide behind being locals when they are foreigners. Let’s make a law for everybody who is here.”
The same position was shared by Mr Musasizi who said; “We risk creating a window where people are going to start hiding under domestic [people] when they are foreign. When we talk about local in the current laws, we define local to mean East African Community. There is a risk that we may tamper with the harmonisation of the EAC community.”
Genesis
A fortnight ago, the government through the Ministry of Finance introduced the said proposal as contained in the Foreign Exchange (Amendment), Bill 2023 to elevate the minimum capital from Shs50 million to Shs200 million.
The legislation was tabled and later referred to the Parliament’s Committee on Finance which on June 20 started scrutinising provisions of the said Bill.
Consequently, as procedurally provided in the legislation process, the committee interacted with line stakeholders, compiled a report on the same and reported back to the House.
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