As Farmers are trying to address the current skyrocketing commodity prices that have resulted in reduced business profitability, collapse, increased poverty levels and a reduced standard of living amongst the common people, agriculture is the only hope and major economic activity in Uganda that can boost peoples or farmers’ well-being.
Faced with a sharp increase in prices of chicken feeds and inputs, farmers are now struggling to make ends meet, some are blaming the situation on the long-term effects of the Covid-19 pandemic, the raging war between Russia and Ukraine leading to high logistical costs for imported products and so many others.
Instead of the authorities finding solutions to the problem faced by the majority of Ugandans, The Uganda Revenue Authority has introduced new taxes on agricultural imports that have initially not been taxed. A 10% import duty and 18% Value Added Tax on poultry and livestock feed concentrates imported into the country which is further expected to inflate prices of agricultural produce and inputs at all stages of production.
Following the press conference of the Poultry Association of Uganda held recently, farmers say that this tax was waived off in 2017 and it is illegal for the Uganda Revenue Authority to reintroduce it. They warn that, in addition to driving farmers out of business, it will also lead to an increase in the price of poultry products and inputs like eggs, chicken, animal concentrates etc
This is not so true of the government through Uganda Revenue Authority to introduce these taxes given this period of sharp rise of every home basic commodity price from a match box, salt, soap, sugar, cooking oil to many others used by the common people. In my opinion, these taxes will just increase on the farmers and everyone’s suffering since there being in existence possesses threats to the agricultural sector that employs about 70% of Uganda’s working population and contributes about 36% to the employment sector. Therefore, we plead that the government remove these taxes from imported poultry and livestock concentrates for will result into farmers’ outcry since;
- The poultry and livestock sector that depends much on concentrates since quality and trusted inputs are imported from abroad, will make many run out of the business for they can’t afford the newly overpriced inputs.
- It will decrease disposable income of individual farmers, because it’s expected to take money out of farmers households, People will have less money to spend, less overall savings in their bank accounts and Investments for the future might suffer.
- Low quality inputs (Ingredients and concentrates) for poultry and livestock, this is because most of the inputs produced here are of low quality evident from the farmers using local concentrates.
- Lack of credits to the farmers. If at all these taxes drove businessmen from the agricultural business and they been giving farmers both animals and poultry feed concentrates on credit, production will have to cease since they will have no capital on hand to continue their daily operations.
Several trucks loaded with animal and bird concentrates, key inputs in mixing complete feed for livestock are stuck at Malaba Border in Kenya following the re-introduction of Value Added Tax and Import Duty on these products. The Poultry Association of Uganda labels the taxes illegal since they were exempted through an amendment to the Value Added Tax Act in 2017.
Uganda Revenue Authority says this is not a new tax and they are scrutinizing the classification of these concentrates which are supposed to be taxed.
As its stated in the East African Community Customs Management Act, 2004, Value Added Tax Act in 2017 and Value Added Tax Act in 2020 that;
“Some supplies are exempt from VAT, the main categories being services to conduct feasibility studies, locally produced raw materials subject to investment thresholds and industry, liquefied petroleum gas, financial services, health and life insurance, agriculture insurance policies, re-insurance services, unimproved land, leases and sale of certain residential properties, betting and gaming, education, medical and health services, imported drugs, medicines and medical sundries, assistive devices for persons with disabilities, oxygen cylinder or oxygen for medical use, social welfare services, pesticides, and petroleum products subject to excise duty.”
VAT Exempted when imported by dealers under the VAT Act. Exempted from all taxes when imported by persons engaged in agriculture under the 5th Schedule of the East African Community Customs Management Act, 2004.
Among the exempted imported agricultural products are; Poultry parent stock imported by persons engaged in poultry farming. A broiler and layer breeder farms raise parent stock which produce fertilized eggs. Broiler/layer hatching egg is never sold in shops and is not meant for human consumption but for hatching into day old chicks.
Feeds for Poultry and Livestock Poultry. Feed is food for farm poultry, including chickens, ducks, geese and other domestic birds. Modern feeds for poultry consist largely of grain, protein supplements such as soybean oil meal, mineral supplements, and vitamin supplements.
