IMF indicates that the immediate fiscal policy response to the Covid-19 pandemic should account for the particular nature of the health crisis that the global economy faces, one that affects supply, demand, and confidence while being timely, temporary, and targeted across all levels of governments.

The IMF advised that the immediate fiscal policy response to the Covid-19 pandemic should account for the particular nature of the health crisis that the global economy faces, one that affects supply, demand, and confidence while being timely, temporary, and targeted across all levels of governments.

Mr Ssali said there are varied packages that the government can deploy as it tries to boost the economy ranging from fiscal to monetary policies, adding that fiscal policy measures largely allude to creation favourable tax policies that can encourage production and increase aggregate demand, hence stimulating economic growth.

Ms Ssali said from the reading of this theme, one is drawn to the fact that the government will perhaps come up with additional fiscal measures that will gear up business sustainability and continuity just like other countries have implemented.

For example, similar to Kenya's intervention measures- adjustments in tax rates (example, adjustments to the VAT standard rate from 18 per cent to [say] 16 per cent and lowering corporate income tax rate to [say] 25 per cent)

The others are the introduction of additional tax incentives to boost local production by attracting Small and Medium Enterprises (SMEs) into manufacturing/ industrialisation and /or reinstating some of earlier repealed incentives at least for one year such as-initial allowance on eligible plant and machinery with respect to entities situated within a radius of less than 50 Kilometres from Kampala.

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Weak demand to keep inflation rate in check

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