MPs want sh2.6b for operationalizing free zones Act

By Umaru Kashaka

Legislators on the committee of finance, planning and economic development have asked government to find sh2.6b to enable the operationalization of the Free Zones Act in order to modernize investment infrastructure in the country.

The Free Zones Bill 2012, which was passed by Parliament in December last year, defines ‘Free Zone’ as ‘a designated area where goods introduced into the designated area are generally regarded, so far as import duties are concerned, as being outside the customs territory and includes exports processing zones or free port zones.’
 

This means that the goods that land in that designated area, or are manufactured and sold or re-exported are not subjected to customs duties and other rules of production that would apply outside the zoned area.
 

The Committee noted that the Act is vital in promoting both domestic and foreign investment or establishments which will increase employment opportunities and household incomes in turn bringing about economic development.
 

They said that it’s imperative that government finds that money because the Bill when it was passed it was accompanied with a certificate of financial implication as required by section 10 of the Budget Act, 2001.
 

“When we were passing this Bill, government knew that they will fund the activities within the Act. So they should find the money and also set up an authority that will set the operational rules of the zone, and the developers to ensure that the zones are operating in accordance with the set rules of procedure,” said the Kyaddondo North MP and committee chairperson, Robert Ssebunya.
 

The Kioga County MP, Anthony Okello, explained that the law covers all types of special economic activities such as export processing, manufacturing under bond, industrial parks, technology parks, tourism parks and free trade zones.
 

“This will enable flexibility in the regulations of particular forms of economic activity under regulations passed under this law and would eliminate the need to pass entirely new legislation for new types of special economic activity,” he stressed.
 

The lawmakers said they worked tirelessly to ensure the country gets a specific policy framework for strategic sector investments in the country.
 

They said they had wanted free zone to be controlled both by a Bureau made up of the board of Uganda Investment Authority (UIA) in collaboration with the Uganda Revenue Authority, but UIA has also got its own issues like the lack of board.
 

According to the Executive Director of the East African Center for Trade Policy and Law, Jacquiline Pimer, all the activities of the zones will be subject to customs supervision by the officials of Uganda Revenue Authority.
 

“The tax laws of Uganda including the East African Community Customs Management Act shall provide the tax related incentives for operation of the zones,” she said.
 

How it would work
 

Pimer says financially able developers make detailed proposals to the Bureau (Authority) for a specific area that they would want to establish into either an export processing zone or a free port zone.
 

The proposal would include the structures to be set up like ware houses, factory facilities for hire, security systems to mention but a few.
 

“Once the Bureau grants a license to one or two developers, the establishments are set up in the zoned area and licenses granted to every producer, exporter or business person looking to operate in the zoned area,” she said.