EAC looking into Ugandan VAT on Tanzanian rice

By Correspondent

EAC's Director of Customs and Trade, Peter Kiguta

The East African Community (EAC) Secretariat is investigating allegations that Uganda charges 18 per cent value added (VAT) on rice from Tanzania.

EAC’s Director of Customs and Trade, Peter Kiguta, said they are yet to receive a formal complaint from Tanzanian rice exporters but will still carry out investigations on the matter.

“We have however contacted Uganda to give us a feedback on whether they are imposing VAT on the rice. If it is established that the VAT imposition is discriminative against Tanzanian rice the relevant provisions of the Customs Union Protocol will be invoked,” said Mr Kiguta in a statement.

If found guilty, Uganda will be penalized accordingly, he noted in the statement responding to complaints from local rice producers.

“And if the VAT is imposed across the board including locally produced rice then the national law will be left to apply since there will be no discrimination,” he noted.

The Rice Council of Tanzania (RCT) has been complaining against discrimination by authorities in Burundi, Rwanda and Uganda against local rice exported to the three EAC countries under provisions of the Customs Union Protocol.

RCT Vice Chairman, Carter Coleman, said in a recent statement that local rice exports are still facing tariff barriers in the three countries as it is charged VAT and sometimes hiked import duty. Mr Coleman, who is also CEO of Kilombero Plantation Limited, called on the Ugandan authorities to lift the discriminatory taxes.

“Please get your government to lift the tariff on Tanzania rice as you are bankrupting local farmers,” Coleman said in the statement also addressed to Ambassador Philip Idro, Chairman of Uganda Rice Millers Association.

Idro has argued that Uganda and the EAC need to protect their markets as cheap Pakistan rice which enters the bloc’s through Kenya threatens rice farmers in the region.

“This is important because Africa as a whole wants to make farmers grow more rice,” he argued recently while lobbying EAC governments to impose a 75 per cent duty on rice imports into the region. 

Idro also wants Kenya to revoke its agreement with Pakistan which allows Kenya to import its rice while exporting tea on barter trade terms approved by the EAC.

“Kenya should be importing rice from Uganda or Tanzania and not Pakistan,” he argued. Kenya imports over $1m worth of rice daily from Pakistan.