Amidst protests from Kenya over increased taxation on agricultural products being exported to Uganda, President Yoweri Museveni on Wednesday stated that it was a deliberate move on his part.
Museveni remarked that as a move to protect Uganda's interests, his administration would continue taxing consumer goods.
Additionally, goods that help in production and industrialisation would continue to be exempted from import tax.
“There is no import tax on select categories such as pharmaceuticals, machinery, and raw materials used for input into manufacturing or development projects,” Museveni remarked on Uganda’s tax policy.
“The issue on the table is the import of consumer goods, which are not medicines, machinery, raw materials, or intermediate products, and our taxation on those items is deliberate.”
Museveni termed the move to continue taxing consumer imports as a strategic tax policy to develop an independent, integrated, and self-sufficient economy.
On how Uganda would have a self-sufficient economy, Museveni promised to protect traders working in pharmaceutical, machinery and raw materials used for input into manufacturing or development projects.
Museveni further added that export tax on those products will also be negligible.
The move by Uganda is likely to hurt the Kenyan economy as the East African Community (EAC) is one of the country’s largest trading partners.
Additionally, Kenya’s exports to Uganda are largely consumer goods with the list dominated by animal, vegetable fats and oils, and cleavage products.
Other top exports to Uganda are; salts, soap, sugar and mineral fuels.
In April, Uganda imposed an extra Ksh3 tax for every kilogram of Irish potatoes being exported to the country.
Uganda Revenue Authority (URA) justifying the extra tax remarked that Uganda had for long undervalued the product.
