URA installs rice testing machine at Mutukula border after 100 trucks intercepted over import duty tax

Rice traders protest in Kyotera District after URA impounded their trucks on November 1, 2023. PHOTO/AMBROSE MUSASIZI

What you need to know:

  • Importation of rice outside the East African Community attracts an Import Duty of 75 percent yet the rice imported from EAC member states has zero percent imported duty tax.

Uganda Revenue Authority (URA) has acquired an advanced machine to test imported rice through Mutukula border and determine its country of origin.
The machine will help to identify rice imports from Tanzania and other countries outside the East African Community.
This follows reports that some traders were importing rice from countries like Pakistan and declare it as being sourced from Tanzania to dodge import duty tax.

Importation of rice outside the East African Community attracts an Import Duty of 75 percent yet the rice imported from EAC member states has zero percent imported duty tax.
According to the URA Commissioner in charge of field services, their customs office at Mutukula border has in the past months recorded losses due to some rice traders who do not want to declare the mixed rice imported from Pakistan and shipped to Uganda through Dar-es-Salaam port in Tanzania.

“Rice imported from countries within the EAC, is exempted from the import duty tax and only pays withholding tax of only 6 percent but many traders have been dodging this. So , we have introduced this machine to reinforce and safeguard the interests of local rice producers and ensure fair trade among the East African countries,’’ he said.
Mr Kiwanuka said both Uganda and Tanzania are committed to adhering to the import regulations and curtail the likely revenue losses.

On  October 31,  over 100 trucks of rice were intercepted at  Customs Offices in Mutukula Town  after URA officials claimed the rice was being imported  from Pakistan not Tanzania  and had to pay  import duty which most traders were trying to dodge. 
However, rice traders protested URA’s decision claiming that the rice was imported from Tanzania and not from Pakistan as URA was alleging.
They said that the tests for their rice that was done by URA were wrong because they even had in possession documents indicating that the rice originated from Tanzania.

URA officials testing the imported rice at Mutukula border on November 16,2023. PHOTO/ ISSA ALIGA

But in a November 2 meeting with URA officials , rice traders and long distance truck drivers agreed that upon arrival at Mutukula , samples of rice will be picked for laboratory analysis to establish the origin and the rice  which will pass the tests will be allowed into the country after paying the withholding tax of 6 percent and the rice with the non-conforming results will be required to pay both the import duty tax and withholding tax.

There has been a remarkable increase in volumes of transit cargo through Mutukula border post ever since it became a one – stop-border –post, which operates 24 hours daily since 2017. For seven years now, transit goods, passengers, travellers and exports exiting through Mutukula to either Tanzania or Uganda, stop once for clearance by immigration and customs officials.

Available statistics show that Uganda’s demand for rice stands at around 380,000 metric tonnes per month ,with total local  production of about 180,000 metric tonnes  per season ,leaving a deficit of about 200,000 metric tonnes per month .
Uganda imports Rice primarily from Tanzania , South Korea , India , Pakistan ,United Arab Emirates , and China .