Uganda Struggles to promote local sugar as imports flood market

Even with a 100 % tax imposed on imported sugar, Uganda Revenue Authority continues to collect more taxes from the importation of sugar. According to Vincent Sseruma the head of public and corporate affairs at URA, over 242 million shillings have been collected inform of taxes in the last seven months. But following the presidential directive to close some Sugar warehouses, there is fear that the taxman might lose revenue.

Information from Uganda Revenue Authority show that as of July 2018 businessmen have imported over 986,181 kilograms of sugar mainly from India, Brazil and China of which 45,719,199 kilograms is being kept in different warehouses.

This has forced the president to order for the immediate closure of sugar bonds, arguing that the existence of such bonds, have left the neighbouring countries sceptical of Uganda’s capacity to supply the East African region with enough sugar.

Uganda Revenue Authority head of public and corporate affairs, Vincent Seruma says different types of sugar are imported into the country.

“Ugandan imports industrial sugar used in factories and then the regular sugar and this all is kept in bonds.” Says sseruma vincent

But even though the country is benefiting in form of taxes, President Yoweri Museveni is determined to protect local industries.

But according to Sseruma bonds are by law under customs and a part from the industrial sugar that isn’t manufactured in the country, the ordinary sugar imported in Uganda is 100% taxed with an additional 5% excise duty on each kilo of sugar.

“The aim of this tax is limit importation of sugar which competes with local manufacturers, we only don’t tax industry sugar “seruma noted

Most of the imported sugar ends up in multiple bonded warehouses found in Ntinda and along the Naguru stretcher road. These include export traders bond, Liberty bond found in Namanve, inward Africa along 6th street in Industrial area and shumuk in Kyambogo, which re-export sugar to Rwanda, South Sudan and DRC.

“Uganda has positioned its self has a business hub and most traders store their goods here and look for market”

President Museveni order follows a recent move by the Tanzanian Government to slap an illegal 25% import duty on Ugandan sugar following uncertainties surrounding its originality.