Parliament has dismissed the controversial coffee agreement signed between the government and Uganda Vinci Coffee Company Limited (UVCC) earlier this year saying it is in bad taste.
The agreement signed by the Ministry of Finance on behalf on government would ensure the Italian private company adds value to the country’s coffee beans and promote its export.
However, the agreement has been bashed by a number of people stakeholders in the coffee business were not consulted.
Parliament recently tasked its committee on trade to investigate the agreement and report back to the House for debate.
On Wednesday, the committee chairperson tabled its report before parliament before it was debated by MPs.
Following a heated debate, parliament adopted the report and the various recommendations as made by the Trade Committee chaired by MP Mwine Mpaka.
The House consequently voted to have the controversial coffee deal terminated for being in bad taste.
The Attorney General, Kiryowa Kiwanuka who was criticised green-lighting the deal said government would consider the recommendations by parliament.
“We shall take the recommendations and review them and report back to Parliament as required on the actions in respect to the report,” he said.
The report
Earlier, a report by the Parliamentary committee chaired by Mwine Mpaka noted that the government had failed to follow its own laws before okaying the deal.
The report branded the agreement illegal and unenforceable.
“The agreement is unconstitutional, illegal, void and unenforceable at law since it violates various provisions of the laws of Uganda, including Articles 2,79 and 152 of the Constitution of Uganda, sections 4 (1)’,7(l), 19 and 2l of the Income Tax Act Cap 340, sections 4 and 5 of the Value Added Tax Act Cap 349, Section 4 (1) of the Excise Duty Act, 2014, section 7 of the National Social Security Fund Act Cap 222, sections 54 and 59 of the Uganda Citizenship and Immigration Control Act Cap 66:’ and section 80 of the Local Government Act Cap 243,” the committee said in its report.
The committee also noted that it was illegal for government to exempt the investor from paying taxes including income tax, Pay as You Earn, Excise Duty, Stamp Duty, VAT, Import Duty and corporate income tax.
According to the committee chaired by Mbarara City South’s Mwine Mpaka, the tax exemptions were unjustified since the Italian company didn’t qualify for such waivers .
“The tax exemptions were illegalIy, unlawfully and irregularly granted by the minister responsible for finance since the relevant provisions of the Income Tax Act Cap 34O, the Value Added Tax Act Cap 349, the Excise Duty Act,2014, the National Social Security Fund Act Cap 222, Uganda Citizenship and Immigration Control Act Cap 66 and the, Local Government Act Cap 243 do not empower the Minister to, by agreement, restrict, waive or limit the application such.”
The committee said it was wrong for government not to consult stakeholders in the coffee value chain including farmers and Uganda Coffee Development Authority who have a big say and would be affected by the deal.
Legislators noted that the same Italian company had failed to start or complete the construction of the Specialised Lubowa hospital.
The committee said such a company should not be trusted with another deal of such magnitude and wondered how the government made such an error.
“The Attorney General, Hon. Kiryowa Kiwanuka failed to carry out an appropriate legal due diligence in exercise of his statutory functions under article l19 (4) (b) of the Constitution to draw, peruse through and approve the agreement between Government of Uganda and Uganda Vinci Coffee Company Limited in spite of the agreement containing provisions t infringed the Constitution and various other laws,” the committee said.
Recommendations
The committee consequently recommended that the controversial deal is cancelled with immediate effect because it is in bad taste.
“The government is directed to terminate this Agreement and report to Parliament, within six months from the date of this report. Upon termination, government should regularize its relationship with Uganda Vinci Coffee Company Limited through proper due diligence, due process and proper stakeholder consultation before any further business can proceed,” the committee recommended.
“Government should consider extending appropriate incentives to the already existing 47 local companies that are doing value addition.”
Debate
In a heated debate, the legislators blasted government for rushing to sign the agreement without thorough consultation with the various stakeholders.
“We need to define who an investor is in this country. Somebody comes here with nothing, we give you land, water, tax holidays, free electricity, contingency liability to go & borrow. Is Uganda the investor or those people?” Butambala MP, Muwanga Kivumbi asked on the floor of parliament.
“Who is this Pinetti, we have been told she has gone to Sango bay, the same woman is Lubowa and we have been told the same person is in roads. What is so special about this person?”
Bukimbiri County MP, Eddie Kwizera said the coffee is owned by Ugandan and thus the government does not have a tradable commodity meaning it cannot sell what it doesn’t own.
Kimaanya-Kibonera Division legislator, Abed Bwanika could not agree more.
He said it was wrong for government to commit Ugandan coffee without consulting the farmers and other stakeholders.
“It is the best deal ever”- Finance Ministry defends controversial coffee agreement
