Connect with us

FARM NEWS

Company gets Shs16b tax break to import rice

Published

on

A rice grower at Doho rice farm . A row is brewing between Trade minister Amelia Kyambadde and rice growers over allowing a single firm to import rice from Tanzania tax-free. PHOTO/FILE

A row is brewing between Trade minister Amelia Kyambadde and rice growers over allowing a single firm to import rice from Tanzania tax-free, a move other players say disadvantages them and frustrates the growing of rice in the country.
The Rice Association of Uganda (RAU), as a result, has sent a protest note to Ms Kyambadde, questioning the logic behind the ministry’s decision to allow a single firm to import 50,000 metric tonnes of rice from Tanzania without paying taxes.

The complainants argue that if the decision of the ministry was to allow importation of rice from Tanzania, it should have been open up to whoever is willing to engage in the business.
The importation of the cheap (tax-free) rice is hurting the rice growers, they  say.
The ministry issued an import permit to Ms Gotovate Uganda Limited on July 15.

The ministry also worked to ensure that the firm got a tax waiver which allowed it to bring in the rice without paying VAT and withholding tax. The import permit is valid until December.
The rice farmers say Gotovate Uganda Limited and Mansoor Mohamed Kayondo, to whom some of the documents related to the rice imports are addressed, were not known as players in the rice sector until then. By press time, we were unable to reach Mr Kayondo, to whom the documents directed to Gotovate were addressed.

“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 Rachel Mbabazi, the chairperson of RAU, told Sunday Monitor on Thursday afternoon.
Ms Mbabazi also thinks the decision is a contradiction of the “Buy Uganda Build Uganda” (BUBU) policy that the Ministry of Trade has been promoting as a means of boosting local consumption and increasing household incomes.
She has now penned a letter demanding that Ms Kyambadde explains herself.

In the letter, dated September 3, a copy of which Sunday Monitor has seen, Ms Mbabazi questions why Ms Kyambadde took the unilateral decision to allow the importation of rice on concessional terms without first consulting other stakeholders.
“If we had been asked to offer an opinion, we would have surely explained the harm in such an action. I would, therefore, like to request for enlightenment regarding the conditions under which a single company was granted a stay of application on 18 per cent VAT,” Ms Mbabazi wrote.
The Commissioner of External Trade at the ministry, Mr Emmanuel Mutahunga, declined to discuss matters around the concessional permit.

“That is a high profile matter that would require the minister herself. Please get in touch with her,” Mr Mutahunga said.
By press time, our calls to minister Kyambadde’s known mobile telephone number went unanswered. She also did not respond to text messages. It is estimated that least $4.5m (approximately Shs16.72b) in taxes, which should have been collected by the Uganda Revenue Authority (URA), has been lost as a result of the tax waivers.

Sector reeling
Ms Mbabazi says the rice, which was imported under the arrangement and clearly labelled “Islamic Relief Rice” ,has flooded the market, displacing locally produced rice.
Mr Venugopal Pookat, the managing director of Kibimba Limited, formerly Tilda Uganda, told Sunday Monitor that locally produced rice can hardly compete with imported rice because it comes in on the cheap.
“We have tried to reduce the prices as much as possible but we still cannot compete,” Mr Venugopal said.
This has placed actors in the sector in jeopardy at a time when they are struggling for markets due to the effects of the Covid-19 pandemic.

“Because of this (flooding of tax-free rice on the market) farmers are forced to store their paddy hoping for better prices in the future. It is not only our local farmers who have been affected,” Ms Mbabazi writes.
She hastens to add that it is not only farmers that have been affected by the cheap tax free rice.
“This has also led to a reduction in business for local millers. The entire rice industry and the livelihoods of nearly three million people who depend on smallholder production is in distress because of this decision,” she adds.

Long standing war with Tanzania
Mr Phillip Idro, the chairperson of the Rice Millers Council of Uganda, told Sunday Monitor that most rice farming communities, for example those in Nwoya and Bulambuli districts, have since opted to grow other crops, especially fruits and vegetables until rice from Tanzania stops coming in.

Mr Idro said this incident is the latest in a long standing fight that local business people have been having with their counterparts in Tanzania.
In 2018 Tanzania banned Ugandan sugar on its market on grounds that Ugandan sugar producers were importing cheap sugar from Kenya and Brazil and repackaging it for export to Tanzania.  It then imposed a 25 per cent excise duty on sugar that had been exported by Kakira Sugar Limited. The sugar was later returned to Uganda.

Now Mr Idro says the fight over rice came up in around 2017, when Ugandan millers sought to import paddy rice from Tanzania, but the Tanzanians insisted on selling milled rice, which the local millers rejected opting to import from Pakistan.
“We proposed to have a quota slapped on imported rice from Tanzania, but Ugandan officials abandoned us. We are now on our own yet, the Tanzanians will not negotiate with us because we are not in government,” Mr Idro said.
URA QUIET
Speaking to Sunday Monitor by phone on Thursday, Ms Mbabazi said the only way the situation in the sector can be normalised is by levying taxes on the rice.
“All that we are saying is that the tax should be levied on the rice. If they pay VAT and withholding tax, it will bring them back on a level playing field with the rest. They should pay tax for whatever had come in earlier,” Ms Mbabazi said.
She said  this was drawn to the attention of URA during a September 18 meeting, but that the tax body is yet to respond.
On Thursday afternoon the manager of public and corporate affairs at URA, Mr Ian Muhimbise Rumanyika, promised to revert, saying he was yet to get clarification on the issues, but he had by press time not done so.

**Daily Monitor

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

FARM NEWS

Govt moves to set up food and agriculture regulatory authority

Published

on

Agriculture minister Frank Tumwebaze tabled the Food and Agriculture Regulatory Authority Bill, 2026, for first reading in Parliament on August 25, 2026. (Credit: Maria Wamala)

The Bill has been referred to the Committee on Agriculture for scrutiny. The proposed authority will regulate the manufacture, processing, importation, exportation, distribution, transportation, advertisement, labelling, storage, sale and supply of veterinary medicines, agricultural chemicals, veterinary equipment and devices.

KAMPALA – The Government has proposed the creation of a food and agriculture regulatory authority to bring food, animal medicines, agricultural chemicals and related products under one regulatory framework.

Agriculture minister Frank Tumwebaze tabled the Food and Agriculture Regulatory Authority Bill, 2026, for first reading in Parliament on August 25, 2026.

The Bill has been referred to the Committee on Agriculture for scrutiny. The proposed authority will regulate the manufacture, processing, importation, exportation, distribution, transportation, advertisement, labelling, storage, sale and supply of veterinary medicines, agricultural chemicals, veterinary equipment and devices.

It will regulate food and feed manufacturing, processing and distribution, oversee food and feed safety, develop standards, inspect and certify agricultural inputs, and establish traceability systems for regulated products.

The Bill’s memorandum presents a troubling picture of the current food and agricultural regulatory system, stating that the country is “flooded with counterfeit substandard veterinary medicines and agricultural chemicals.”

It cites concerns over medicines and chemical residues, aflatoxins, harmful microorganisms and heavy metals in food and feed, warning that such contaminants compromise public health and the safety of agricultural exports.

Members of Parliament during Plenary on Tuesday. (Credit: Maria Wamala)The memorandum attributes the problem in part to “fragmented regulation”, which it says has resulted in weak and uncoordinated regulation by multiple agencies, duplication of efforts and inefficiencies in enforcement.

It argues that the absence of a single body overseeing the food and agriculture value chain “undermines the effectiveness of regulation” and creates uncertainty for stakeholders.

The proposed authority will inspect food premises, certify meat for public consumption, inspect and certify fish, regulate processed and semi-processed food, and oversee the storage and transportation of food.

The Bill seeks to regulate food packaging, labelling and advertising, while prohibiting the use of radioactive materials, heavy metals and banned substances in food. It provides for residue monitoring to detect harmful substances in food products.

Members of Parliament during Plenary on Tuesday. (Credit: Maria Wamala)

For agricultural chemicals, the Authority will license manufacturers, distributors, fumigators and commercial applicators. It would regulate the import and export of chemicals, as well as their packaging and labelling, storage, sale and advertising.

The Authority will have powers to recall agricultural chemicals and deal with prohibited, banned, restricted, falsified or adulterated products.

The Bill proposes inspectors and analysts with powers to access establishments, conduct sampling and analysis, seize adulterated products and oversee the disposal of obsolete, banned, prohibited and expired products.

Inspectors will, in certain circumstances, order the detention, return or destruction of non-compliant consignments.

The proposed authority will be a body corporate with perpetual succession. Its functions include the registration of veterinary medicines, veterinary devices, veterinary equipment, agricultural chemical application equipment and agricultural chemicals for use in Uganda.

The authority will be governed by a nine-member board appointed by the minister. The board will comprise a chairperson, six members with expertise in veterinary medicine, agriculture, pharmacy, standards and environmental science, and two representatives of farmers nominated by a recognised farmers’ federation.

The Bill contains 13 parts, 101 clauses and three schedules. It seeks to amend the Dairy Industry Act, Fisheries and Aquaculture Act, National Coffee Act and Animal Feeds Act, while repealing the Agricultural Chemicals (Control) Act and the Food and Drugs Act.

The proposed law seeks to give the Minister power to issue written policy directions to the authority.

The Government argues that the new framework would improve the quality and safety of agricultural inputs, strengthen consumer protection and help Uganda gain access to regional and international agricultural markets.

The Bill moves to the Agriculture Committee, where MPs are expected to examine its regulatory, institutional and enforcement provisions before it returns to the House for further consideration.

The public, including experts, are expected to provide their views on the Bill.

Continue Reading

FARM NEWS

Concern over low cassava yields in Bukedi region

Published

on

For decades, cassava has been more than just a crop in Bukedi Sub-region in eastern Uganda. It has served as a lifeline, providing a reliable source of food during droughts, a key source of household income and an integral part of the region’s cultural identity.

Across the districts of Budaka, Kibuku, Butebo, Pallisa and parts of Butaleja, cassava gardens once stretched across vast expanses of land. Families harvested the crop throughout the year, processed it into flour and sold surplus produce in local markets.

Today, however, those fields are shrinking. Farmers are increasingly abandoning cassava cultivation in favour of crops they consider more profitable and less risky, raising concerns about food security and the future of one of Bukedi’s traditional staples.

Continue Reading

FARM NEWS

Parliament gives Jinja land office three months to clear backlog

Published

on

Some staff of the Jinja Ministry Zonal Office meet members of the Parliamentary Committee on Land on August 27, 2026. PHOTO/TAUSI NAKATO.

Continue Reading

Resource Center

Legal Framework

READ BY CATEGORY

Facebook

Newsletter

Subscribe to Witness Radio's news and report updates



Trending

Subscribe to Witness Radio's news and report updates