Africa-Press – Uganda. Manufacturers in the Non-Alcoholic Ready to Drink sector have petitioned Parliament to reconsider taxes on soft drinks, which they say are not only chocking development, but have put the entire industry as risk.
In an April 4 petition to the Parliamentary Committee on Finance, Planning and Economic Development, manufactures, among them Crown Beverages, Coca-Cola Beverage Africa Uganda and Harris International noted that despite challenges such as high taxes, constricted consumption, increased cost of operation (digital tax stamps) and inelastic product price, players had since 2017 invested in bottling lines and manufacturing plants to a tune of $277m (Shs1 trillion).
Therefore, the letter noted: “… we bring this serious matter to your attention and humbly request that you consider the matters mentioned above as having adversely impacted the operating environment and allow for business recovery,” adding that as stakeholders, they had met investment commitments by injecting significant capital, which, therefore calls for the creation of a favourable trading environment that is “mutually beneficial to the industry and the fiscus”.
The manufacturers want government, through Parliament, to reduce Excise Duty of soft drinks by 2 percent to cushion businesses, many of which are struggling with after effects of Covid-19 and slowed economic growth.
“We have experienced severe shocks emanating from the after effects of Covid-19 and Ebola along with the significant attendant disruption in global supply chains. We request that Parliament … honours commitments made over the last five years, to harmonise excise duty rates in Uganda with those of the rest of the East African Community,” the letter reads further, noting that the committee should consider a revision of the Excise Tax regime from 12 percent to 10 percent.
In 2017, government committed to reduce excise tax rates on soft drinks to stimulate increased investment in the sector, while addressing the regional tax variances for a favorable and competitive fiscal environment.
Asked about the matter, Mr Ezra Rubanda, the Uganda Manufactures Association executive director, yesterday told Monitor, they had taken up the matter and would today hold meetings over the same.
“We are meeting the chairman of [the] Finance, [Planning and Economic Development Committee] tomorrow [today] to present and agree on the issues raised in the letter. The delegation of manufacturers will be led by the chairman UMA,” he said.
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