The Government of Uganda has launched a simplified e-accounting tool aimed at helping small informal enterprises improve financial management, enhance tax compliance and transition into high growth compliant medium-sized businesses.

The tool was launched by Dr. Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury (PSST), who is also acting as Minister of Finance, Planning and Economic Development.

Developed by United Nations Conference on Trade and Development as part of technical assistance to Informality Management for Compliance and Revenue Mobilisation (IMCORE) Program, the digital platform is intended to support small informal enterprises through simplified accounting and record-keeping systems.

Speaking during the launch, Dr. Ggoobi said small and medium enterprises play a critical role in Uganda’s economy through employment creation and income generation.

According to Dr. Ggoobi, Uganda’s informal sector has more than 1.8 million micro, small and medium enterprises, most of them operated by women, youth and refugees. He noted that the sector contributes 54.5 percent of Uganda’s Gross Domestic Product (GDP) and accounts for 92 percent of employment.

Dr. Ggoobi said weak financial management remains one of the major barriers preventing businesses from formalising and growing.

“Without proper records, businesses cannot assess performance, financial institutions cannot trust them and tax compliance remains inconsistent,” said the PSST.

He added that improving financial record keeping is critical to achieving Uganda’s Ten-Fold Growth Strategy.

The PSST further described the e-accounting platform as a “single window solution for both legal and fiscal formalization.”

The tool was officially handed over to the Ministry of Finance, Planning and Economic Development following a pilot testing phase.

During the handover ceremony, Elena Botvina, Economic Affairs Officer in the Division on Investment and Enterprise at UNCTAD, said the platform is easily accessible, convenient and cost-effective for business record keeping and reporting.

She said the digital tool helps businesses improve cash management, track expenses and increase revenue.

During the pilot phase, 30 small informal enterprises in Kampala received support to test the platform. More than 490 small and medium enterprises have since tried the tool and expressed appreciation for its usefulness, while 241 businesses have already registered and created accounts on the platform.