UGANDA – Rice importers, under the umbrella body of the Kampala Rice Traders Association, have accused the Uganda Revenue Authority (URA) of conflict of interest and impatience in dealing with the surging prices for rice in the local market.
According to traders, the price of rice has surged from shs4,500 (US$1.19) per kilogram to shs5,000 (US$1.33) and, in some places, even shs5,500 (US$1.46) per kilogram.
They are pointing fingers at the temporary ban on the entry of trucks carrying rice from Tanzania imposed by URA last week.
This ban, imposed at the Mutukula border post, has left numerous trucks stranded for over a week, sparking fears of an unreasonable increase in rice prices.
Seeking resolution, traders met with URA officials to discuss the situation, but the meeting quickly grew intense as concerns were raised and criticisms were voiced.
Importers accused URA of inconsideration and conflict of interest, further complicating the already precarious situation
This comes after Uganda’s lawmakers recently raised concern over the failure of the Uganda Revenue Authority to collect Shs240.628Bn (US$64M) in Value Added Tax (VAT) on imported rice from other East African Community (EAC) countries.
When asked to explain delays in collecting these taxes, the URA Commissioner General, John Musinguzi informed the Committee that the delay was due to prolonged legal battles playing out in courts of law.
According to him, the matter went to court and the Court of Appeal, on 16th September 2022 agreed with URA, and demand notices were promptly issued.
However, an appeal was lodged (Civil Appeal No. 27 of 2022) and the importers obtained an interim injunction effective 14th November, which was still subsisting and URA could not levy taxes.
One of the key points of contention emerged when URA officials began taking samples of rice from the stranded trucks for testing without the consent of the importers.
The results of these tests are yet to be disclosed, leaving the importers in the dark regarding the status of their shipments.
URA Commissioner Customs, Abel Kagumire, attempted to shed light on the situation, explaining that the ban was initiated after Tanzania notified Uganda in April about its rice shortage.
This notification raised suspicions regarding the source of rice being imported into Uganda. According to the East African Common Market Protocol, food products from member countries are taxed at a lower rate of 6%, while those from non-member countries face a much higher tax of 75%.
Livingstone Ssenyonga, the chairman of the Kampala Rice Traders, expressed his disappointment, stating that URA should have consulted with them before taking such drastic measures.
The ongoing negotiations between the rice importers and URA have now entered their third day, but the market has is losing patience.