Simplifying the poultry, animal feeds tax fight

The fight between Uganda Revenue Authority (URA) and importers of concentrates and premixes for making poultry and animal feeds has worsened, leading to the seizure of 250 inbound trucks over unpaid taxes. PHOTO/ COURTESY 

Uganda Revenue Authority’s decision to seize hundreds of inbound trucks transporting raw materials for making poultry and animal feeds over Shs18b tax arrears has ignited a meltdown in the businesses, leading to shortages and price hikes for dealers, farmers and consumers.

Andrew Rubayihayo, farmer 
The current standoff between the government and the feeds importers has caused delays at the border and the trucks are not moving. This means the supplies, especially the concentrates, are not there [on the market].
Some dealers have increased the prices because they are not sure how much tax they are going to pay to Uganda Revenue Authority (URA). It’s a dilemma. As farmers, we also don’t know what to expect and we don’t want to go back to local suppliers because they are unreliable and some have quality issues.
Although the prices of concentrates have not changed as of now, in the coming few weeks the situation is going to change from bad to worse unless the impasse is resolved. In situations where you can’t access concentrate of five percent, you are forced to order for another one which is more expensive than the earlier one. The consumer pays the price.
And because we are dealing in a sensitive business, the chicken that we rear have to eat every day and so the expectations is that you have to keep food for them every day. My call to government is that this need to be sorted out as quickly as possible. Otherwise, people are making losses. 

Andrew Rubayihayo

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Aga Sekalala Jr, poultry farmer
Some farmers have been using these products (imported feeds) and are dependent on these products because they find them convenient or they find them useful. However, another part of the industry feels that these imported products have an unfair advantage over locally-produced products.  
And that is [to] some extent what Uganda Revenue Authority (URA) [is trying to resolve]. So, there are several sides to this particular piece of the puzzle. Even the farmers locally here are not all on the same side per se since some use these [imported] products; like them and find them useful. [Yet], some farmers don’t use these [imported] products and find them affecting their own business. 
So, the standoff right [as] it stands is that URA has allowed these products to continue coming to the market and once they add up taxes, these products are going to be more expensive. It will no longer be cheap to import them and a consumer will have to pay more for the eggs and the meat as well.

Aga Sekalala Jr

Henry Biyizinka, dealer 
The ongoing trend right now does not yet affected the sector, it’s there in the middle because nothing has happened so far. Unfortunately, Uganda Revenue Authority (URA) has imposed the tax on ingredients for food manufacturing and it has even imposed the tax on the basic ingredients. 
So right now, the way things stand everybody is subject to that tax. In the process, even the manufacturers are subjected to the same tax. In the process of that, the prices of everything is going to become higher and we are going to pass on that cost to the farmer and eventually to the consumer.
So, there is need for more consultations so that URA understands its goal; are they trying to promote local production of these items or are they trying to increase collection of taxes? Right now the way it appears [that there] is a drive to increase (tax) collection because even us, who import pre-mixes and basic raw materials and vitamins, we are also [charged] same tax and yet we are at basic level.


Henry Biyizinka

George William Kayongo, feeds importer
We import [feeds] from The Netherlands to Uganda and the situation at hand is still a challenge since it has now taken a whole month ever since we received communication from Uganda Revenue Authority (URA) regarding the imposed taxes of Value-Added Tax (VAT) and import duty.
Our containers were impounded at the border and from then up to now we are still incurring charges which are really high. A day a container spends at the border costs us $500 (Shs1.9m) and with those charges, I don’t know at what cost I’m going to have [and sell] these products in my stores.
But we have some small light [at] the [end of the] tunnel; that may be by this week, we might have these products at our disposal because some products have started moving. I got authorisation to move, but the cost is moving higher and higher because they are charging us every day.
Since the week started, we had like 500 containers grounded, but since some have started moving, now they may be like either 200. The containers are moving on the promise that we are going to pay the tax.

George William Kayongo