Asadu Kistu Kigozi, Assistant Commissioner Field Services at URA
Kampala City Traders Association (KACITA-Uganda) has hailed Uganda Revenue Authority (URA) for listening to traders and creating a fair business environment for traders since the outbreak of Covid-19 in March 2020.
The remarks were made by KACITA Chairman, Thadeus Musoke Nagenda at the 3rd day of e-Bomba Ya Business Summit at URA headquarters on Friday.
“URA has been very dynamic lately. They listen to us, engage and formulate a fair business environment,” Nagenda said, adding, “Where they are not so cooperative, we come in and engage, discuss and see how we can protect our businesses.”
Commenting on the current government approach of import substitution, Nagenda said KACITA is part of the government strategy.
“Time to time, we come in to engage and advise,” he said.
According to Nagenda, currently, URA is very efficient and fast.
“We do appreciate it. There are loopholes that we can engage in,” added Nagenda.
He, however, noted that some of their members are not educated about what import substitution really is but he was quick to say that with e-Bomba Ya Business, an annual summit, the business community will appreciate the strategy even better.
Nagenda says that the strategy has several advantages.
“Some of our members could not understand the essence of import substitution. But it’s a very brilliant idea for the government. It has several advantages. In business you solve problems or challenges at a profit or at a cost,” he said.
He noted that import substitution helps the business community improve on technology, eases access to goods, creates employment, widens exposure of the business people and improves infrastructure.
For instance, Nagenda says that the railway is being renovated to aid transportation of raw materials from the Port to Kampala. He adds that the business community are bench-marking on how best to locally produce goods here, add value, make money and employ the local persons.
Import substitution helps us improve technology. Like we benchmark with other countries. Helps us create employment and widens exposure. Eases access to goods. We can easily access goods like in Namanve. Helps improve infrastructure. When we were launching the new locomotives.
Asadu Kistu Kigozi, Assistant Commissioner Field Services at URA says information to facilitate import substitution is readily available to both local and foreign investors.
Earlier, he had said that URA has since put in place measures to facilitate import substitution.
Kisitu spoke widely saying: “as URA, it is our mandate to make sure that we facilitate our manufacturers and producers who are making sure that instead of spending our money on imports, we produce these goods locally here in the country. As a government agency, we have put in a lot of initiatives in addition to the policies that the government has put in place.”
Kisitu added: “But particularly in this era of Covid-19 pandemic, there were extra areas that were covered to make sure that we become self-reliant in terms of production.
One of the areas that the government centered on most to make sure that the items that will help to fight Covid-19 are produced here given that there was a whole world supply challenge given this pandemic, it was paramount that the goods are produced in Uganda. So, one of the initiatives that we have put in place to cover this is that the government relieved taxes on all items that are used to manufacture items like sanitizers, medical and non-medical face masks among others.”
As we talk now, Kisitu says that “we have over 136 companies producing sanitizers which were previously being imported into Uganda and that has not only helped in combating the Covid-19 pandemic but also in the supply chain creating jobs to our people.”
Kisitu says that to fully facilitate import substitution, the government deliberately relieved taxes on some items so that they can be produced locally.
“We have a duty remission on items that are produced here,” he says, adding, “Of course all imports for raw materials that are produced here attract zero percent rate meaning that if you imported raw material to produce an item here, you are not going to pay import duty and the other taxes that you pay are accounted for as you make your returns to URA like VAT, and the withholding tax that is part of the income tax regime,” Kisitu notes.
In so doing, he says, “as URA, we are at the forefront of facilitating these raw materials entering the country. We run a 24-hour program to make sure that our producers and our manufacturers have their goods in time. So, even during the pandemic, it was evident that URA never closed its doors. The trucks were cleared at all the borders of Uganda to make sure these raw materials reach in time so that production can continue. We also run a program of manufacturing under bond. There are certain items that would ordinarily attract tax but because they are being used in the production of goods here in Uganda, they are given an incentive to store them in their premises without paying the tax and when URA confirms that these raw materials have been used for production then they are good to be exempt from this tax.”
He adds that there is the duty remission where a manufacturer purchases items from the common market which are not on the already listed items for exemption by the law.
He explains that this is when “you buy them from the open market which already or where those items already have tax, then you are able to account for the fact that these items I bought during the time.”
Kisitu says that there were people who had tax obligations to meet during the Covid-19 period and they had imports.
“You know when you have an outstanding clearance in the system, the system would automatically switch you off if you have not yet accounted,” he said, adding: “So, we were able to make sure that we suspend that system because the period was unprecedented as we call it. It was not planned by anyone. So, that was done to make sure there is business continuity but also to make sure that most especially local production can continue.”
Exports were equally facilitated, Kisitu says.
“The way imports were facilitated at that time. If there were an importer who wanted to take their coffee, we made sure that the service was available to make sure that we moved these exports because we know for us to increase our balance of payment, we need to increase exports and we specifically targeted that industry as well,” he explained.
On top of these, Kisitu says URA is also supporting export free zones and industrial parks which he says have exemptions. These, he says are all geared towards making sure that production of previously imported goods is done in “our country and then we benefit from the many along the chain advantages that come with it, most importantly, the cost of production goes down, the cost item, employment, and at the end of the day we increase our GDP.”
URA e-Bomba Ya Business Summit returns on its Day 4 on November 5, 2021 with Patience Tumusiime Rubagumya, Commissioner Legal Services and Board Affairs URA); Francis Gimara, Head ALP East Africa Group; Francis Kamulegeya, Country Partner Pricewaterhousecoopers and Joseph Okuja, Director, Tax and Regulatory Services Libra Associates and Consultants as panelists to dissect Alternative Dispute Resolution(ADR): The role in Domestic Revenue mobilization.
