Kenyan traders through the Kenya National Chamber of Commerce and Industry (KNCCI) raised concerns over the increase in taxes for Kenyan traders ferrying Irish potatoes to Uganda in trucks.
In a statement, the Chamber faulted the Ugandan Revenue Authority's move to increase the withholding tax from Ksh4,288 (USD32) to Ksh 42,210 (USD315), thus raising the clearance fee from Ksh15,000 to Ksh50,000.
The chamber warned that the latest policy decision is likely to affect trade between the two countries and strain the diplomatic relationship between the two neighbouring countries.
Further, the chamber lamented that as it stands, the clearance fee for the trucks accounts for 83% of the transport cost, a figure officials from the organisation warned is not sustainable over the long term.
“Notably, the transport cost from Nakuru (where Irish potatoes are currently sourced from) to Kampala is Ksh 60,000, therefore a clearance fee that is 83% of the transport cost is unsustainable’, read the statement in part.
The KNNCI also posed a concern about what it described as Uganda violating the common union tariff of the East African Community (EAC), which aims to promote seamless trade and economic integration among member states.
Additionally, the traders revealed that they were working closely with the State Department of Trade in Kenya, the Uganda Chamber of Commerce and Industry (UCCI) and drivers’ associations to ensure that the issue was addressed promptly.
This move comes amidst a backdrop of strained relations between Kenya and Uganda in terms of trade relations.
Initially, Uganda had sued Kenya at the East African Court of Justice over what the country described as Kenya's move to block importation of its oil using Kenya Pipeline infrastructure.
The issue morphed into a full-blown diplomatic issue prompting frantic diplomatic talks to stem the crisis.
Uganda had began exploring alternative ways to import the product, while operating on the belief that it was possible that a solution was not going to be found anytime soon.
Kenya and Uganda however eventually found common ground after Kenya granted the neighbouring country's national oil company the license to import fuel through Kenya Pipeline.
