The Ugandan government has scrapped the Value added Tax (VAT) on imported rice from Tanzania.
The development comes two weeks after Uganda's President Yoweri Museveni appealed to all the seven East African Community (EAC) member states to remove all non-tariff barriers, saying they were hampering economic integration and development in the region.
In a July 29 letter addressed to the customs staff, the Assistant Commissioner for Trade at Uganda Revenue Authority, Mr Alexander Rubanda, said all rice originating from Tanzania will attract a zero percent tax duty.
“All rice originating from the Republic of Tanzania and with a certificate of origin according to preferential treatment will effective July 27 attract a 0 percent import duty in accordance with paragraph 1(L) of the third Schedule to the VAT Act and Article 15 of the Protocol establishing the East African Community Customs Union,” Mr Rubanda said.
While addressing journalists in Kampala yesterday, the secretary general of Kampala Rice Traders Association, Mr Robert Ssentongo, commended the government for scrapping VAT of Ush180,000 ($47.09) per tonne of rice, which he said was affecting traders.
Mr Ssentongo also announced that the Parliamentary Committee on Tourism, Trade and Industry had recommended in their report that the Rice and Agribusiness Development Foundation (RADFO) stops collecting money from rice traders at various border points.
Report
The August parliamentary committee report on the alleged unfair trade practices in the rice subsector indicated that RADFO has been conniving with URA officials to fleece rice importers of Ush180,000 ($47.09) per tonne of rice imported from Tanzania compared to Ush4,000 ($1.05), which the traders were paying before.
The committee recommended that civil action be taken against RADFO with the aim of obtaining compensation amounting to Ush17.8b ($46.5 billion), which was unlawfully and fraudulently collected from the traders. The Speaker of Parliament on May 5 instructed the Tourism, Trade and Industry Committee to probe the alleged unfair trade practices in the rice subsector following a petition by the traders.
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