Uganda: Tea Traders Pay Double Tax in Kenya
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New Vision (Kampala)
6 August 2008
Posted to the web 7 August 2008
Joel Ogwang
Kampala
UGANDAN tea exporters pay double tax in Kenya, Raymond Agaba, the acting commissioner in charge of internal trade, has revealed.
He said after clearing their dues at the Mombasa entry point, the traders are charged additional fees of between Ksh500 (sh12,000) and Ksh1,000 (sh24,000).
"The same tea is paid for at Mombasa. It is a recent development that is impeding regional trade," Agaba said at a workshop for East African Community (EAC) ministries staff at Colline Hotel, Mukono.
The double taxation comes after Ugachick, a local poultry breeder and others, were suspended from selling their chicks in Kenya.
"Trade should be flowing. We don't want to create a misunderstanding by retaliating," he said.
Agaba said trade ministries of the two countries were discussing the problem.
Nicholas Kanabahita, the Uganda Revenue Authority's legal and bonds manager, said in spite of being a landlocked country, Uganda was reaping from the EAC Customs Union.
Kanabahita said trade between Uganda, Kenya and Tanzania had increased by 20% to $1.9b in 2006 from $1.52b in 2004.
"Uganda's imports from Tanzania increased to sh46b in 2007 from sh28b in 2005, while imports from Kenya also grew to sh157b in 2005," he said.
Kanabahita said the Customs Union had agreed to eliminate barriers to regional trade.
Goods from a member country should not be sold in another country at a lower price to avoid suffocating local industries.
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"There will also be equal trade incentives to avoid trade diversion (where industries relocate to a country with incentives)."
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