Uganda: Soft drink producers want reduction on excise duty

Juice and water producers in the country want the imposed 10 percent excise duty levied on bottle water reduced to enable easy competition in the East African region.

Trade minister Amelia Kyambadde and Gordon Wavamunno during the meeting at Africana

The manufacturers under their umbrella body; the Uganda Water and Juice Manufacturers Association echoed their concerns during a meeting with trade minister and Uganda National Bureau of Standards (UNBS) officials held at Hotel Africana on Tuesday.

The over 40 registered firms highlighted high excise duty, increased counterfeit products and unregistered / uncertified companies engaged in bottling water as the major impediments to their business.

“The excise duty on bottled water in Uganda is higher than that of other East African countries at 10 percent.  This has affected tax collection as most companies evade tax.

The high excise duty has also affected production forcing many companies to shut down,” said Gordon Wavamunno the chairperson Uganda Water and Juice Manufacturers Association.

The manufactures noted that bottled water that does not incur the same level of excise duty from the neighboring countries was flooding the Ugandan market hence curtailing the growth of the industry.

Uganda and Rwanda are the two EAC nations with the excise duty on bottled water standing at 10 percent. Kenya and Tanzania charge 5 percent.

There are over 60 bottled water producers in the country but only 47 are registered and certified by UNBS.
“We demand that the excise duty is reduced to 5 percent in the short run and in the long run to be scrapped of completely since water is necessary in life,” said Wavamunno.

Trade Minister Amelia Kyambadde has said the law will be changed to allow mandatory acquisition of the Q (Quality) mark for all water producers in the country.

The water manufacturers had demanded that the trade minister exercises her powers to force companies without the Q mark to do so.

Kyambadde disagreed with the UNBS chief Dr. Ben Mayindo who had earlier said the issue of acquiring the Q mark was voluntary as a policy. “Madam Minister the Q mark acquisition is voluntary and we can’t force it on companies unless the policy is changed,” said Mayindo.

Kyambadde however reiterated her stand to rid the country of counterfeits. “It is only when we have Q mark as mandatory that we shall get rid of fake water in the market. We shall as government amend the law and change the policies to make it mandatory,” she said.

Kyambadde said she would write a brief to the finance minister on the request made to reduce the excise duty from 10 percent to 5 percent. “My powers and role can only end at writing to the finance minister coupled with attaching your request,” she said

By Patrick Jaramogi, The New Vision

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