Experts Want Law To Curb Profit Repatriation By Multinationals

Posted by: Kyeyune Andrew Jonathan in Economy August 30, 2021

Experts have called on government to enact laws to reduce on profit repatriation by multinationals. The development follows the announcement of the retail store Shoprite exiting Uganda after 21 years of service.

Some experts even said firms like Shoprite have no legacy or tangible investments to talk about.

Francis Muhiire, an economist at Makerere University Business School (MUBS). He said the exit speaks quite a lot about the state of Uganda’s economy and lessons ought to be learnt.

Another business expert, Damalie Ssali, said the business model of multinationals usually excludes local supply chains. This factor makes them only takers, not investors, in the economy.

Apparently, Government has also continued lauding multinationals for creating the much needed jobs.

However, these experts say this is only half true when you compare the low pay given to workers in relation to the earnings made by the firms from the local markets.

Muhiire also called upon government to enact laws on profit repatriation. This will help reduce the amount of money that flows out of the economy as taxation of profits is insufficient.

According to reports, multinational telecom companies are biggest culprits when it comes to repatriation of profits. They shift an estimated 3% of the profits made between 2003 and 2009 out of Uganda.

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