Shs16b tax waiver splits rice importers 

A row has erupted among rice growers after the Ministry of Trade allowed a single firm to import tax-free rice from Tanzania.
Since Sunday Monitor broke the story on October 4, rice farmers have protested the ministry’s decision, saying it puts them at a disadvantage and frustrates rice growing in the country.

The Rice Association of Uganda (RAU) headed by Ms Racheal Mbabazi, sent a protest note to the Minister of Trade, Ms Amelia Kyambadde, questioning the justification behind the decision to allow a single firm, Gotovate Uganda Limited, to import 50,000 tonnes of rice from Tanzania without taxation.
“I find it odd that (the Ministry of) Trade would be soliciting from (the Ministry of) Finance an exemption for an importer. It is the trader’s job to solicit and not the minister,” Ms Mbabazi told Daily Monitor on Friday.

However, Mr Isaac Kashaija, the chairperson of the Rice Business Sector Association Limited, another rice growers association uniting 58 companies, on Wednesday castigated RAU for protesting the ministry’s decision on tax exemption for one company.
Mr Kasahija said the major reason for exempting Gotovate Uganda Limited is to address the rice shortage in the country and tame rice prices that escalated during the Covid-19 lockdown.

He said currently, the demand for rice in Uganda stands at about 380,000 tonnes per month, but the total local production is approximately at 180,000 tonnes, leaving a deficit of 200,000 tonnes.
“Ugandan rice farmers are facing a number of challenges, something that has led to low production. If we fight importation of rice from our neighbours within the East African region, our consumers in Uganda will not have enough food. We can also borrow expertise from Tanzania on how they are succeeding instead of fighting each other,” Mr Kashaija said.

He added that the Ministry of Trade did not exempt only one company as alleged by RAU. He said two other companies, have also benefitted from the tax exemption to import 150,000 tonnes each. 
He, however, said the other two companies, Akhcom and Williex, are still sorting certain issues before they import.
“Gotovate Uganda, a company under our association, only requested to import rice from August to December 2020 to save Ugandans who were in total lockdown from exploitative traders that were charging them exorbitant prices,” Mr Kashaija said.

He further said 14 other companies have been importing rice from Tanzania with tax exemption of more than Shs1 trillion following a decision of court.
“This was a decision which was taken by the government after 14 rice trading companies petitioned court against the 18 per cent Value Added Tax (VAT) charge in 2014. Court declared an injunction and since then the case has never been resolved, leaving the 14 companies to import without paying tax,” Mr Kasahija said.

“We have also learnt that Ms Mbabazi is one of the beneficiaries of the 14 companies that were overcharging Ugandans [for rice] and she is not happy that Ugandans are getting relief from the exploitation and wants to disorganise the rice industry,” he added.

He urged government through the Attorney General to expeditiously dispose of the pending petition in court because an injunction is a short term intervention, but in this case it has taken close to seven years.
Daily Monitor could not reach Ms Kyambadde for a comment as she did not answer our calls or respond to our text message.