Kampala- Manufacturers will, effective July 1, pay normal rates to import all raw materials after the phasing out of the duty free importation specific raw materials and industrial inputs, a top official has said.
Mr Moses Kaggwa, a commissioner in the ministry of Finance, said during a Deloitte post-Budget meeting yesterday that the list of 135 raw materials and industrial inputs is no longer necessary since Uganda is part of the East African Community (EAC) and the Common Market for East and Central Africa (COMESA) arrangement where goods move tax free.
Uganda was given a preferential treatment for the 135 raw materials used in the production of goods exported to other East African countries, also known as the Ugandan List in 2005, to enable Uganda develop her industrial sector to the level of Kenya and Tanzania.
The list includes inputs such as galvanised steel wire, fibre board, cement clinkers, copper wire, aluminium alloys and black printing ink.
Others are newsprint in rolls or sheets, bread improver, corrugated paper, non-wood parts of foot wear, active yeasts, vinyl, alcohol, adhesive paper and sewing thread among others.
This preferential treatment has in the past been a source of conflict with other partner states who say it gives Ugandan companies unfair advantage in the EAC market since goods produced using these duty-free inputs do not attract the 10 per cent EAC Common External Tariff and thus making them cheaper.
The list which was supposed to end in 2010 after five years of implementation was extended after Ugandan manufacturers requested that it is maintained until infrastructure bottlenecks in energy and transport among others, are addressed.
Analysts’ views
However, Mr Godfrey Ssali, a policy analyst at Uganda Manufacturers Association (UIMA), said UMA, Private Sector Foundation of Uganda, Uganda Revenue Authority, Finance and Trade Ministries are still holding meetings to discuss the way forward, saying it will be premature for him to comment about the matter.
Sir Richard Kaijuka, the vice president of Uganda Chamber of Mines and Petroleum, however, said government should not only concentrate on collecting more revenue but should also ensure that it is put to proper use.
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