Illegal fees spark rice war at Mutukula border

Rice importers say despite trading within East Africa, they still have to pay road user fees.  PHOTO/COURTESY

What you need to know:

  • Traders claim the fees at paid to persons who claim to be clearing agents but cannot ascertain if they belong to URA.

Traders who import rice from Tanzania are protesting the illegal and exorbitant fees charged on their merchandise.
In a January 16 petition to the Prime Minister, the traders under the umbrella body, Uganda Rice Trade Growers and Processor Forum say a private entity, Rice Agribusiness Development Foundation (RADFO), designated by the Ministry of Trade to oversee rice importation, has levied exorbitant fees to the produce.

“The leadership of (RADFO) together with its cohorts is levying a charge of Shs200 per kilogramme of rice imported in Uganda in addition to levies paid to Uganda Revenue Authority. It is our sincere belief that the said tax/levy is not only illegal, but also exorbitant and amounts to double taxation with the probable consequence of creating an importation monopoly for selected few to the detriment of the greater body of rice importers,” the petition reads  in part.

In a December 22, 2021 letter, the Minister of Trade, Ms Harriet Ntabazi, assigned RADFO to oversee the operations of all rice importers for six months starting January 1.  
This, according to the letter, followed failure by the importers to organise into one body for proper regulation, and ensuring stability in the trade.
“In order to save the sector from further injury and save millions of farmers and millers, government has assigned you the responsibility of acting as the apex body of rice importers from within East African Community partner states…other existing rice import associations at the border are advised to work under your guidance,” the letter reads in part.

The letter, however, does not specify the roles of the body.
Traders told Daily Monitor yesterday  that since January 1, a tonne of rice crossing into Uganda at the Mutukula border is charged Shs200,ooo, which amounts to about Shs500 million in collections  per day.
The importers say despite being an agriculture product trading within East Africa, they have always, to be granted entry, paid money loosely termed as road user fees. 
The traders add that the money is paid to persons who claim to be clearing agents, but cannot ascertain if they belong to URA.

“Let me speak in terms of trailers. We used to pay Shs500,000 and since it was affordable, we paid to just get through with no trouble but now you have to part with about Shs7 million, with no  receipt or any documents to people we do not know. We want to know what caused that jump. That is why many trucks are stranded at the border,” a trader said.
Importers say they are not issued receipts after the payments, and those who do not pay are denied entry. 
They say the move by the minister was illegal and has greatly affected their business. 
They have also petitioned Parliament, seeking an end to the trend.

“Most of our trucks are stuck in Tanzania and cannot load rice because of this illegality by the Ministry of Trade. Parliament needs to intervene and investigate the actions of the ministry and the mess in the rice sector otherwise we shall take the ministry to court over this illegal tax,”  another trader said.
“This is an illegal tax. All taxes are supposed to be collected by URA but how can we pay tax twice to two organisations, one to the government and another to a private entity. Has the Ministry of Finance and Parliament sanctioned this tax? If so, why is it not paid to URA and receipted? Which powers does the Minister of State for Industry have to appoint a private organisation to run affairs of the borders?”  the importer added.

The traders allege that the private entity that collects millions in shillings per day is being fronted by some official in government.
“We are aware that this organisation is being promoted by four ministers, one of whom is from greater Masaka who wants to create a monopoly. The godfather or godmother behind that organisation that is the ultimate beneficiary of the illegal tax proceeds amounting on average 460m daily,” a trader said.

Minister speaks out
Trade minister Harriet Ntabazi told Monitor yesterday that the appointment of a body to regulate the border was necessary due to the disorder that was cropping up. She said the levies were not part of the ministry arrangement. According to the minister, there are some unscrupulous individuals who acquire licences, but instead station themselves at the border as clearing agents. “It is not an arrangement of the ministry. Somebody comes and picks a licence and for us we think he is going to Tanzania to buy rice when he is just going at the border to become a clearing agent. Those are the ones causing the problem. The real traders who go to Tanzania have no problem and they are the one under RADFO,” she said.
 

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