Uganda Revenue Authority Seizes Poultry, Animal Feeds Trucks Over Unpaid Taxes

Uganda Revenue Authority Seizes Poultry, Animal Feeds Trucks Over Unpaid Taxes
Uganda Revenue Authority Seizes Poultry, Animal Feeds Trucks Over Unpaid Taxes
  • The recent scarcity and inflation in the prices of poultry and animal feeds have been linked to the seizure of raw materials by the URA.

The Uganda Revenue Authority (URA) has decided to take a hard line in seizing raw materials after finding out that some importers were involved in activities that undermined tax collection from the sector.

The URA also submitted that the clampdown is also due to the shoddy activities by these importers of bringing into the country premixes, an inferior feed nutrient, instead of the then tax-exempt concentrate.  

Reaction Trails the Move by Uganda Revenue Authority

According to one of the big industry players, Mr. Henry Biyinzika, Chief Executive Officer, of Biyinzika Poultry, farmers won’t be able to sustainably feed their birds if this standoff persists.

He added that his company produces animal and poultry feed, including concentrates; the current high price of maize and soya is very costly making it hard to produce feeds and concentrates.

Presently, the URA is holding 250 inbound trucks at the border over unpaid taxes. The 250-plus drivers and their turn-men, some of whom have been stranded at the Malaba border for close to a month since URA announced the new tax policy, said they are running out of cash.

The drivers held up at the border are part of a crew for the more than 131 containers carrying raw materials from the port of Mombasa destined for Nalukolongo, a Kampala suburb, for processing animal and poultry feeds.

The trucks have left more than 3,000 tonnes of animal and poultry feeds stuck at the border which could lead to animal and poultry animal feed manufacturers on the Ugandan side running out of raw materials.

Since 2018, raw materials for animal and poultry feeds were excused from paying taxes, until September 23 when the tax body started charging Import Duty tax, Value Added Tax and executed a tax levy on each consignment.

According to Ms. Josephine Nakimera, a clearing agent at the Malaba border, the URA was supposed to have officially informed the clearing agents and importers before implementing the policy instead of announcing it abruptly.

She further mentioned that the biggest challenge right now is that the URA is demanding that importers pay all the taxes for the goods imported into the country in 2018.

Mr. Suleiman Siudu, a truck driver stuck at the border, said he was stopped from proceeding to Kampala by officials from the tax body on September 23 without any proper explanation and is still waiting till now to be cleared.

According to another driver, Mr. Paul Chopa, who has been held up at the border for a month while waiting for his cargo to be cleared, he paid Shs16,500 at the DOJ and JOJ inland container depot on the first day.

Since then, he pays Shs23,500 in daily parking fees, bringing the total amount spent on parking to close to Shs1m.

Mr. Peter Sireka Namalwa, the chairman Uganda Clearing Agents and Forwarders Association mentioned that there are many trucks parked by the roadside waiting to be cleared and this might lead to congestion soon.

URA reacts

According to Mr. Ibrahim Bbosa, the Assistant Commissioner of Public and Corporate Affairs at URA, the VAT Act was amended in 2017 and it had zero VAT on premixes, including zero import duty on premixes.

He mentioned that issues only began to arise when importers started bringing in concentrates and declaring them as premixes so they can escape the 18% import duty charged on concentrates.

As a solution, the URA has provided a 30-day window (starting on October 17), to clear goods as long as importers agree to sign a letter of indemnity.

This letter is a legal document that binds parties to fulfill the commitment in an agreement. 

According to Mr. Bbossa, the indemnity states that ultimately, when a verdict comes out that the traders are supposed to pay a tax, they shall go back to them because the law allows URA to do so.

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Uganda Revenue Authority Seizes Poultry, Animal Feeds Trucks Over Unpaid Taxes