MEMBERS of Parliament (MPs)on the finance committee are in a deadlock with the finance ministry over proposed amendments to the customs law that seeks to exempt temporary exports from import duty on their return into the country.
The Customs Management Act 2003, says the Uganda Revenue Authority commissioner general will allow upon request, goods temporarily exported for outward processing to be re-imported with exemption from import duty and taxes if they are returned in the same state.
But the amendment has raised more questions than answers, with MPs querying the loopholes in it that risks Ugandaâ€™s premuim quality coffee and tobacco products once taken out for the purported processing.
The amendment targets mainly coffee and tobacco for outside processing, but is a general law which is open to machinery out for repair, and any other item that may be exported with an intention of returning it.
The MPs argued that since Uganda was reputed for its good soils which yield the best quality crop in the region, the possibility of crafty businespeople exporting the crop under the guise of â€˜outward processingâ€™ and once out, exchange it for low quality which is eventually returned in processed state, was high.
They also pointed at the possibilty of blending Ugandan coffee with other lower quality coffee, as a way of helping the latter sell.
â€œThere are a lot of reservations. The law lends itself to a lot of abuse. Chances of exchanging our good coffee for bad coffee or blending it with bad stuff are high,â€ MP for persons with disabilitiesJames Mwandha (pictured), who said he dealt in coffee said.
â€œWhat mechanisms are we putting in place to ensure that this law is not abused?, â€ MPs asked.
MPs Query Finance Over Proposed Customs Law