Importers want govt to drop 2.5% tax on agro chemicals

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Importers, manufacturers and distributors of agro chemicals in Uganda want the 2.5% tax levied on imported agro chemicals such as pesticides and fungicides, scrapped.

Although agricultural products had been exempted from paying taxes, at the end of June, another tax policy introducing a tax on imported agrochemicals was cleared and became effective on July 1.

According to Agnes Mbabazi Kabwisho, the chairperson of Crop Life Uganda, these are among the issues currently affecting the industry and importers and distributors of agrochemicals.

Mbabazi explained to journalists on Thursday, July 31, that effective July 1, 2025, new taxes were introduced on agriculture inputs—specifically 1.5% as an infrastructure levy and 1% as an import declaration fee.

Mbabazi, who spoke to the media on the sidelines of a consultative meeting between CropLife and the Ministry of Agriculture, Animal Industry and Fisheries at Fairway Hotel in Kampala on Thursday, said that in an era where agriculture is already facing many challenges, production is bound to drop.

“What is happening is that we are in the era where everything in agriculture is a challenge, starting with the changing weather. Issues of logistics when importing agriculture-related inputs from countries like China are becoming expensive,” Mbabazi said.

She added that in the whole mix, farmers continue to remain poor because they cannot afford the inputs necessary for crop and food production.

“So, imposing this tax at this point in time is shooting the farmer. What is happening is that importers and manufacturers are going to transfer the cost to the farmer,” she added.

According to the Commissioner for Crop Inspection and Certification at the Ministry of Agriculture, Animal Industry and Fisheries, Dr Paul Mwambu, the meeting was aimed at understanding the new taxation concerns and how these will affect the consumer and industry players before finding a workable solution.

“The concern is on the new taxation policy in regard to the infrastructure levy and import declaration fees. We are engaging the government with main dealers to understand the implications of this levy and the tax on the final consumer. So we shall support their engagement with the Secretary to the Treasury to ensure that there is a common understanding of the new levy,” Mwambu said.