MSMEs are the engine of growth for the economic development of the country and are key drivers in fostering innovation, wealth creation and job creation in Uganda. They are a major source of technological innovation and new products and form approximately 80 percent of the country’s entire private sector. In spite of the crucial role, the competitiveness and sustainability of MSMEs have remained very limited. The state of play for majority of MSMEs has in many cases been linked to their limited access to investment finance owing to a number of difficulties.

As Government tries to promote Uganda as an investment destination, it must offer preferential tax treatment in order to attract the scarce private capital, associated technology and managerial skills, among others. Besides increasing Uganda’s competitiveness, granting tax incentives to certain sectors accelerates job creation for the country. By the end of FY2018/19, 286 projects had been licensed and a 151 percent increase in planned employment was registered from 23,816 jobs.