Kampala — THERE is free land at the industrial parks for investors who undertake projects in the priority sectors, a top official disclosed last week. The sectors are agriculture and agro-processing, information communication technology, mining and oil exploration, packaging, printing and publishing, finance, education, medical services and tourism.

"In the recent budget, the Government offered a number of incentives to investors in the priority sectors and is also planning to offer free plots of land to investors in the same sectors," said Aston Kajara, the state minister for investment.

The minister was commissioning the Margherita Industries factory at Najjera, a city suburb. The $2.5m factory manufactures candles, drinking straws, packaging and agricultural products. "This kind of investment is encouraged by the Government because it produces products that are used by our own people and reduces the outflow of foreign exchange," Kajara said.

Eng. Musiimenta Bakeine, the managing director, disclosed that the machinery was acquired through leasing. "However, our monthly instalments are being subjected to value added tax.

"This defeats the policy of industrialisation by punishing those who acquire machinery on lease," Bakeine complained. He said the tax increased the cost of acquiring machinery through lease by more than 18% compared to getting it via loans.

He said categorising lease as rental income to the banks was stifling industrialisation. "The interest on machinery is also at 22%, which is double the normal rate for machinery imports," Bakeine said.