Uganda Quality Coffee Traders and Processors Association (UQCTPA) members on Tuesday, called upon government to reduce the withholding tax levied on them, from 1 per cent to 0.25 per cent.
The coffee traders made the request while meeting a team of Uganda Revenue Authority (URA) officials at Delta Hotel, located in Bweyogerere town in Kira municipality.
“Like we put it clearly in the past, the 1 per cent withholding tax on coffee traders is a big amount, where our net profits will end up in paying taxes, given the fact that coffee prices keep fluctuating downwards”, said Patrick Nabongo, the vice chairman of the association.
He said the coffee industry in the country has already started declining, because farmers have resorted to planting other crops, in fear of being suffocated by the 1 per cent withholding tax, levied by Government.
“The turn up of coffee production has gone law of late. This 1 per cent withholding tax should be reduced to at least 0.25 per cent, if coffee traders are to remain in business”, he said.
Early own, the coffee traders petitioned the ministry of Finance to look into their grievances on the 1% withholding tax.
The coffee traders, through their association leaders said government should endeavour to carry out consultation with all stakeholders in the coffee industry, before coming out with a tax, because coffee prices are governed by international markets.
“Currently, coffee prices have fallen in price from shs 5600 to shs 5300. This means that coffee traders are likely to make loses on their stocks, which they bought from farmers at higher prices. Coffee business is not like maize, beans or pineapple business, whose markets are local,” said Nabongo.
URA Client Relations Officer, Alex Mugasha, said URA’s mandate is to implement the law governing tax collection, that started on 1st July 2018. He said the tax law was already gazetted and all coffee traders who are obliged to pay the said tax have also been gazzetted.
He warned non gazetted coffee traders from soliciting the 1 per cent withholding tax from the farmers or any other coffee dealers, saying whoever will be caught will face the heavy arm of the law.