The East African Community (EAC) Council of Ministers has extended the tax waivers on inputs used in the manufacture of textiles, footwear, and assembly of motorcycles, among others in the region.

The ministers say the move is to reduce the cost of doing business and boost economic recovery following the Covid-19 impact.

This was revealed by Mr Patrick Ocailap, the Deputy Secretary to the Treasury, on Wednesday, June 23, 2021 during the Post East African Community Tax Budget Dialogue for 2021/22.

“We proposed to extend duty remission for essential inputs used by manufacturers, under the EAC Duty Remission Scheme. These inputs are taxed at reduced duty rates (0% or 10%) for a period of one year. The normal rates are usually 10% or 25%. This is aimed at reducing the cost of inputs and hence the cost of doing business in Uganda. Some of these inputs include those that are used in the manufacture of textiles, footwear, and assembly of motorcycles, among others,” he said.

In this regard, Mr Ocailap said the EAC Sectoral Council on Trade, Industry, Finance, and Investment adopted the Partner States’ budget proposals for the fiscal Year 2021 / 2022.

“The detailed proposals will be published in the EAC gazette, usually by 30th June,” he said.

Mr Ocailap revealed that the ministers decided that equipment used in the manufacture of textiles and footwear which do not qualify for remission of duty under Section 140 of the EACCMA, 2004 be granted a stay of application up to 30th June 2022.

He added that they directed Partner States that submitted lists for remission of duty to remove items that are available in the region in sufficient quantities.

“The Council of minister directed the Committee on Customs to develop proposals to cater for tools, equipment and spare parts of machines not classified under Chapters 84 & 85 imported by manufacturers of textile & footwear, by November 2021,” Mr Ocailap said.