Exempting taxes on rice should be a short term measure
Prossy Nandudu
Journalist @ New vision
Exempting taxes on rice should be a short term measure


Civil Society organizations have called on government not to completely remove taxes on imported rice.

This follows a proposal by government through the Ministry of Finance to remove taxes on imported rice so as to cater for the food insecurity situation in the country.

The same idea is being hatched in South Sudan too. The Office of the Prime Minister is already distributing food items including rice, maize flour and beans in different parts of the country.

But CSOs led by the food Rights Alliance (FRA) said whereas the idea is good for now, it is not good in the long term. FRA executive director, Agnes Kirabo, said the exemption will be for one year and yet Ugandan rice matures in a space of 90 days.

"What will happen to farmers' rice that will have been produced the hard way taking into consideration the changing weather patterns?" wondered Kirabo.

She added that exempting taxes on rice should be a short term measure so that farmers can sell their produce within the country.

According to Kirabo, such a move doesn't even support government's ‘Buy Uganda Build Uganda' policy which wants all Ugandans to buy local products, as step towards achieving Vision 2040.

By Vision 2040, government wants the country to be transformed into a middle income economy with increased incomes at household level.

"Agriculture is one of the key sectors that will drive the country in that direction so why should we impose such taxes on food which is both commercial and domestically consumed?" quizzed Kirabo.

This was during a meeting organized by SEATINI Uganda, calling on government to increase funding for the Ministry of Trade from 1% to 4% of the national budget in the next financial year.

Africa Kiiza, a trade analyst from SEATINI Uganda, believes the idea of removing taxes to respond to the hunger situation is good in the short term because the country needs food aid to feed districts faced with starvation and hunger.

However government should come up with long term measures of ensuring that there is adequate production of rice taking into account quality, volumes, water for production and packaging among others.

"The Ministry of Trade has created a desk to specifically handle rice. The desk will also work with farmers along the value chains. This shows that rice is a strategic crop so why should they allow rice to continue coming in without taxes after all these efforts?" wondered Kiiza.

He added that such interventions will lead to increased production of rice by local farmers who will now start competing for the market with imported rice. This will further lead to importation of plastic rice which has already been manifested in Nigeria and Ghana, exposing people to health hazards.

"Depending on other countries for food in form of imports will further compromise the security situation of the country and that is why EU countries after the World War II resolved never to depend on another country for food aid and went ahead to put measures of increasing production which has worked for them," he added.

The vice chair of the committee of Trade Tourism and Industry in Parliament, Alex Ruhunda, believes continuous importation of food items will further weaken the Uganda Shilling.

He proposed that efforts should be concentrated on promoting Uganda rice like what was started with upland rice and other rice schemes that are already receiving donor support.

"I think we just have to get our economics right instead of depending on ideas of few smart people who may be into the rice business to think for us and at the same time benefit themselves," said Ruhunda.