By Joyce Namutebi
The committee on agriculture has directed state minister for agriculture, Zerubabel Nyiira to produce a paper on the rationale for imposing Value Added tax on agricultural inputs and implements.
The MPs threatened not to pass the budget of the ministry until the paper is brought to them for scrutiny.
“We are the sector line defenders. We want to defend what you are comfortable with,” committee chairperson, Matthias Kasamba said as committee members cautioned that the tax is going to negatively impact the agricultural sector upon which majority of Ugandans depend for their livelihood.
The concerns were raised during a meeting with Nyiira at Parliament Tuesday. Present was the Commissioner for Agricultural Planning, Samuel Ssemanda and the Executive Director, Dairy Development Authority (DDA), Jolly Zaribwende.
The committee had invited the officials to discuss the proposed taxes on agricultural inputs and concerns on milk.
In the recent national budget finance minister Maria Kiwanuka announced proposal on termination, with effect from July 1, 2014, of VAT zero rated supplies including supply of machinery and tools for agriculture and supply of seed, fertilizers, pesticides and hoes.
She also announced a proposal to terminate VAT exemptions of supply of feeds for poultry and livestock and supply of agricultural and dairy machinery with effect from July 1, 2014.
Freda Mubanda (NRM) asserted, “We put taxes on things we want to discourage such as tobacco, betting and alcohol. We are giving contrary messages to our people .”
With the new taxes, Margaret Kiboijana (NRM) warned of uprising. She said that even tractors should be exempted from tax so that more people go into mechanization of agriculture. She urged government to come up with a policy on seeds and fertilizers. She wondered why Uganda imports fertilizers from Kenya and other countries when they can be produced in Tororo.
The MPs asked DDA to produce a roadmap on how their operations.
On the dairy industry, Kassiano Wadri (FDC) claimed that government wants to, through certain people, create a monopoly so that some processors are cushioned.
He objected to imposition of taxes on agricultural inputs and implements saying emphasis should instead be put on the sector so as to enable the country to be self- sustaining, save foreign exchange and raise revenue.
Wadri reasoned that with the taxes, Uganda’s food products would become very expensive paving way for malnutrition. “At the end of the day very few people will engage in meaningful agriculture.”
During the heated discussions, Oleru Huda (NRM) did not shy away from asking the retirement age of civil servants in the ministry of agriculture saying “there is a level you reach and get tired.” She added, “Why is this government therefore if we can’t help our farmers.”
Ssemanda explained that the taxes were imposed by the ministry of Finance, but Francis Epetait (FDC) said they get surprised when the ministry defends something negative.
Kasamba ruled that for the committee to engage with the ministry of finance on the taxes, they must get the position of the ministry of agriculture.
On the taxes Nyiira wondered whether there is a way to take advantage of the “negative” situation, but Epetait said, “If it is hell, it is hell.
MPs direct minister on taxes