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MPs exempt agricultural inputs from Value Added Tax

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MP Andrew Musasizi

Parliament has widened tax exemptions to mechanized agricultural inputs, in a bid MPs said will give the sector the much needed post Covid-19 boost.

The Chairperson of Parliament’s Committee on Finance, Henry Musasizi said the removal of Value Added Tax from mechanised agricultural inputs will incentivize investment in the sector.

Continued charging of Value Added Tax on materials that are used to locally assemble mechanised farm equipment like tractors, reasoned Musasizi, continues to stifle local assembling plants.

“The VAT should be removed to attract investment in agriculture, if materials and parts used to fabricate agricultural trailers in Uganda are charged VAT; this will lead to an increase in production costs of 18 per cent, rendering Ugandan industries uncompetitive with those that import tractors,” said Musasizi.

While considering the Bill on Wednesday, 15 April 2020, MPs said the exemption is timely considering the ongoing Covid-19 pandemic will cause a spike on global food supplies.

Also exempted from the Value Added Tax are mechanised inputs such as irrigation machines, crop sprayers, tractor mounted hole diggers and combine harvesters among others.

MP Emmanuel Ssempala Kigozi (Makindye-Ssabagabo Municipality) said the exemption will increase Uganda’s self-sufficiency on mechanised agricultural inputs.

The amendments enacted new measures for investors to qualify on tax exemptions on supplies such as construction materials for ware houses, factory, and inputs for machinery to have a minimum of 70 percent of employees being Ugandan, who should earn 70 per cent of the company’s wage Bill.

MP Ssempala welcomed the enactment.

“From the oversight visits done in most Chinese companies based in Uganda, you find that most positions held by foreigners can be taken up by Ugandans, we have all the professions need, let this threshold be increased every year to stop repatriation,” said Ssempala.

The new law has also relaxed capital requirement for investors seeking to enjoy the aforementioned exemptions, placing foreign companies at a minimum of US$10m, while local investors operating in Kampala metropolitan will pick incentives from US$300,000 investments.

Upcountry investors will benefit from the incentives from as low as US$ 150,000.

Such companies are also required by the new law to utilize 50 percent of the local raw materials during production.

The Minister of State for Finance, Planning and Economic Development, Gabriel Ajedra, advised that the requirement to use 50 per cent of local materials may be waived in the event of shortages.

 

Source: Watchdog

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FARM NEWS

Govt moves to set up food and agriculture regulatory authority

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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.

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FARM NEWS

Concern over low cassava yields in Bukedi region

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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.

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FARM NEWS

Parliament gives Jinja land office three months to clear backlog

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

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