Log in

Without trust in gov't, citizens can't pay taxes - Prof Collier 

University of Oxford professor of economics and public policy Paul Collier has said if Uganda is to lift itself out of poverty, it needs a generation that will sacrifice by postponing its consumption while investing for the future.

Collier was speaking at Governor’s public lecture series at Serena hotel on Monday on the The role of the state in structural transformation and development.

He pointed out that China, a global raising star, had a generation that saved 50 per cent of their income and propelled the country to the level it is on.

Prof Paul Collier

“Half of their [Chinese] income was saved and invested,” Collier said. “It was so high and bordering on craze.”

He said it is either the current generation that will make it or their children. Sacrifice also includes willingness to pay taxes, he said.

“Eventually, you tell your children ‘you are prosperous because of the sacrifice we made”.

But Collier was quick to add that sacrifice needs some level of trust that people have in their government to save and pay their taxes willingly.

“People need a guarantee that when they pay their taxes it will be used well. All sorts of crooks along the chain have to be kept off money and that is hard.”

He added that more robust checks must be put in place to protect public money.

“This includes even jailing your friends [who steal],” he said.

He added: “Uganda’s [new] expressway is the most expensive road per km in the world. That is worrisome.”

Collier also said the country needed to develop a strategy beyond agriculture.

“No society on earth has got to prosperity through agriculture. The root to prosperity in a country is through modern firms, proper modern firms,” Collier said.

He said big modern firms allow specialisation and learning by doing for their staff. To have modern firms, he added, the country need a satisfactory regulatory environment, be properly taxed and not extortion.

They need affordable and reliable electricity and connectivity to other firms and its workforce.

“Uganda and other many African countries are still desperately short of proper firms.”

Collier emphasised that land reforms where it is clear who owns what was a significant step to development and prosperity.

He said the country can start with reforming land rights in Kampala and gradually do it nationally. This involves having a clear registry. Rwanda and Ethiopia have done and companies are happy to invest in their countries.

“Where there is no clear title deed, genuine firms are no gonna build on that land,” he said.

The current commission of inquiry into land matters headed by Justice Catherine Bamugemerire is a clear testament that Uganda has a rotten land sector where both public and private land is shared at will by the powerful.

Collier said such cases scare away genuine investors.


Comments are now closed for this entry