Govt Wrong To Tax Mivumba, Says IMF
Jun 04, 2003
THE senior International Monetary Fund (IMF) representative to Uganda, Walter Mahler, has warned that it is an inappropriate government policy to tax imported used clothes (mivumba).
By Geoffrey Kamali
THE senior International Monetary Fund (IMF) representative to Uganda, Walter Mahler, has warned that it is an inappropriate government policy to tax imported used clothes (mivumba).
He said used clothes are being taxed much higher than luxury cars when the industry is Uganda’s greatest success story for the consumer. He said the industry has greatly benefited the masses.
In an article published in Business Vision today, the IMF chief argues that mivumba have mostly benefited the poor who he said do not get any form of assistance from the Government or donors.
Finance minister Gerald Sendaula in his budget speech last year raised taxes on mivumba by 15%, bringing the total tax rate on them to 50%.
The tax hike is seen to be an attempt to deter local traders from importing used clothes and instead buy local fabrics.
Sendaula is expected to present this year’s budget, next week.
Mahler said he would explain in his article “why it is an inappropriate government policy to tax them at a higher rate, higher than the tax rate on luxury automobiles.â€
He said there are over 50 Ugandan importers of containers of used clothing, most of who have shops on Nakivubo Road in Kampala. Each of the containers of used clothes of 500 bundles costs about sh65m.
Mahler said an additional sh25m paid in taxes for each of the containers, raises the total cost, including freight, to sh90m.
Ends
THE senior International Monetary Fund (IMF) representative to Uganda, Walter Mahler, has warned that it is an inappropriate government policy to tax imported used clothes (mivumba).
He said used clothes are being taxed much higher than luxury cars when the industry is Uganda’s greatest success story for the consumer. He said the industry has greatly benefited the masses.
In an article published in Business Vision today, the IMF chief argues that mivumba have mostly benefited the poor who he said do not get any form of assistance from the Government or donors.
Finance minister Gerald Sendaula in his budget speech last year raised taxes on mivumba by 15%, bringing the total tax rate on them to 50%.
The tax hike is seen to be an attempt to deter local traders from importing used clothes and instead buy local fabrics.
Sendaula is expected to present this year’s budget, next week.
Mahler said he would explain in his article “why it is an inappropriate government policy to tax them at a higher rate, higher than the tax rate on luxury automobiles.â€
He said there are over 50 Ugandan importers of containers of used clothing, most of who have shops on Nakivubo Road in Kampala. Each of the containers of used clothes of 500 bundles costs about sh65m.
Mahler said an additional sh25m paid in taxes for each of the containers, raises the total cost, including freight, to sh90m.
Ends