Uganda’s Minister of Finance Planning and Economic Development tabled Tax Amendment Bills of 2021 before Parliament of Uganda for debate. These Bills included the Mining; External Trade; The Fish; and the Tobacco Control Amendment Bills.
These acts were set to take effect on the 1st of July, 2021 and highlighted, among other things, amendments to customs tax laws for import and export. In an internal memo from the Assistant Commissioner of Trade, Geoffrey Okaka, the new changes were elaborated as follows:
An export charge of 5% of the value of a kilogram at export has been placed on processed gold under the Mining Amendment Act, in addition to a levy of 10% of the value of raw minerals exported out of Uganda.
Following amendments to the Tobacco Control Act, an export levy of USD$ 0.8 per kilogram for exported leaf tobacco was imposed, as well as an 8% export levy on the value of fish maw exported out of Uganda.
For one year, the import tariff on cooked potatoes, fresh or preserved, other than seed / natural and artificial honey, coffee, ginger, jams, jellies, frozen meats, cotton seed/sunflower oil has been raised to 60% instead of 25% to encourage import substitution.
The report also depicted increased import duty on applicable to tiles, tomato paste/ preserved tomatoes, television sets, children’s toys, tea (flavoured or not), shoe polish, bread spreads like peanut butter, insecticides, wigs, from a rate of 25% to 35% for a year.
In a bid to encourage the use of clean cooking technology, URA decreased the tariff rate on liquid fuel stoves, ranges, grates, cookers, and household appliances from 25% to 10%.
To develop local content, URA levied a 25% import charge on transformers and a 35% duty on cocoa powder, but removed the levy on flat irons, speakers, LED Blubs, gas cylinders, blenders, and other gadgets, as well as inputs for furniture manufacturing, for a year.
Due to the desire to compete favorably within the regional transport sector, the removal of import duty applicable to Road Tractors for Semi-Trailers and Motor Vehicles (exceeding 20 tonnes) for transport of goods has been renewed while the import duty reduction to 10% on Motor Vehicles for Transport of Goods weighing less than 20 tones, has been maintained.
During a Parlimantary debate on the establishment of these bills, Henry Musasizi, Chair of Parliament’s Finance Committee, noted that the adjustments are aimed at protecting local production, generating revenue given the rising volume of imports and supporting the emerging local industrial sector that has created employment for many Ugandans. This assertion is yet to be tested especially amid economic challenges brought by COVID-19.