Trade ministry bows to pressure, allows duty free import of unprocessed rice
Uganda’s Ministry of Trade, Industry and Cooperatives now says it has allowed the duty-free import of up to 50,000 metric tonnes of unprocessed rice, commonly known as ‘brown rice’, to boost supplies and check prices amid a fall in local production.
The duty-free imports will be allowed for the initial four months effective last month.
Prior to the tax waiver, importing a metric tonne of rice in Uganda attracted $345 or 75% of the value of import whichever is higher as a tax irrespective of the type of rice—husked, milled, processed or packed ready for distribution.
Amelia Kyambadde, the trade ministry said on her twitter handle on May.16 that the import of brown rice under this scheme shall be within a short period and not re-exported to the regional markets.
But millers told The Independent that they were already importing duty-free unprocessed rice especially from Pakistan upon obtaining importing licences from the Ministry of Agriculture, Animal Husbandry and Fisheries
“As per import license condition, millers will have to commit to sell the processed rice at Shs3, 000 retail price from their retail outlets,” she said.
“The import license of unprocessed rice will be limited to a specific quantity of up to 5,000 metric tonnes per miller currently operating in Uganda.”
She said her ministry shall issue import licenses to regulate the import of the agreed volume of the unprocessed rice under some conditions.
But the new developments comes at the time rice millers in the country are already importing unprocessed rice in response to the Ministry of Finance’s decision to scrap tax on unprocessed rice on March 30 to tame rising food prices, illustrating how government entities are uncoordinated in implementing new initiatives.
Ongoing Ministry of Agriculture imports
Earlier, millers told The Independent that they were already importing duty-free unprocessed rice especially from Pakistan upon obtaining importing licences from the Ministry of Agriculture, Animal Husbandry and Fisheries; and thus complicating the whole issue of which ministry is in charge of licences for rice imports.
In a letter dated March 30 to the Uganda Revenue Authority, Matia Kasaija, the Minister for Finance, Planning and Economic Development, said the government waived tax on the import of unprocessed rice effective April 01 for the initial four months to stabilise price of the commodity, which had risen by about 30% since the beginning of this year.
The surge in the price of the commodity is attributed to the prolonged drought leading to food shortage in different parts of the country.
The latest National Food Security Assessment Report compiled by an inter-ministerial team, showed that the food insecurity that had afflicted 1.3 million people in November 2016, had ravaged 10.9 million people by January 2017, with at least 1.6 million Ugandans already suffering food crisis.
“Owing to the food security situation in the country and the need for an appropriate response, Cabinet approved an import duty waiver for unprocessed rice among others, to bring down food prices for those who can afford to purchase on their own,” he said.