Dealers welcome new tax on concentrate feed

A section of dealers in animal and poultry feeds have welcomed the new tax imposed on concentrate feed before it is imported into the country.

Poultry farmers earlier this week protested the new import duty of 10% and VAT of 18% by URA on concentrate feed that they say will see the prices of eggs and poultry products go up.

However, addressing journalists on Thursday, Aimable Mbarushimana, the operations director for Murwana J.Peter Stores Limited that deals in poultry and animals feeds in Kisenyi, Kampala said the new tax will help local animal and poultry feeds manufacturers build their own capacity to produce the feeds, other than relying on importation of the same.

“URA put a tax on concentrates being imported into the country and indeed it is not easy for our counterparts who import. However, government is right to put the tax on concentrates since they come from abroad yet locally in Uganda we can manufacture the same and even more quality feeds for animals and poultry to consume,” Mbarushimana said.

He explained that concentrates are not the only feeds for animals and poultry, noting that locally manufactured feeds are even better for feeding purposes.

According to the dealers, by supporting Ugandans manufacture their own animal and poultry feeds will ensure they build capacity to even start exporting, other than relying on only imports.

“We have a better solution. Why can’t these brothers of ours(importers) get it from local manufacturers or even from within the COMESA region? They will not be paying the 10% import duty. We need to do capacity building in Uganda since we have capacity to produce these feeds locally,”Mbarushimana said.

“By building capacity to manufacture the feeds locally, we will be creating employment for our people locally other than importing and give away this money. When they produce locally, it will help the eco-system in Uganda. We have young people finishing university sitting without jobs but can join the chain of producing and selling animal and poultry feeds. We have people doing research, scientists, nutritionists and farmers in soya bean, sunflower and cotton among others. These are grown locally in Lira, Bushenyi, Karamoja, Mityana, Gulu, Kasese and the entire Teso region.”

According to Agnes Nakandi, another dealer in poultry feeds, government ought to empower local manufacturers through funds to enable them start manufacturing the feeds and concentrates locally but also encouraging international companies to set up factories in Uganda.

She mentioned Nile Agroprocessing Company that used to produce cotton cake locally at a lower price but noted that since its closure, the prices skyrocketed.

“Ugandans should be encouraged to start manufacturing these feed concentrates locally and this way, the prices of animal and poultry feeds will go down, other than relying on imported feed concentrates that have a lot of taxes imposed on them,”Nakandi said.

Recently, URA spokesperson, Ibrahim Bbosa said the tax is not new but noted that the tax body is open for talks with the poultry farmers and importers to explain to them the rationale of the tax.

The law

Animal and poultry premixes as well as animas feed are catered under the VAT Act but concentrates are not catered for under the same law and therefore would attract VAT of 18%  and Import Duty  of 10%.

According to officials, the law was not implemented in the past because the companies had been misclassifying and calling the feeds premixes, yet they import concentrates and therefore were not paying taxes for them.

Because the law allows URA to collect retrospectively, the tax body is now trying to collect taxes for as far as five years ago.

Government is also trying to pursue a local animal feed policy to ensure local manufacturers are supported to produce animal and poultry feed to ensure import substitution.