UGANDA – Uganda Revenue Authority (URA) has announced a new 25% tariff set on imported refined sugars amid the abuse of the import duty remission scheme causing a big challenge to the entire sugar industry.
According to Ms Muliika, the URA Assistant Commissioner for Trade, the import tariff is per the East Africa Community (EAC) raw material duty remission scheme for 2023/2024.
“This represents a compromise position that protects local producers of industrially refined sugar while also leaving the door open for any user that requires it for technical reasons,” URA said.
The move followed a discussion between Ugandan officials and their East African counterparts in Arusha Tanzania.
A report from a business analyst, Mr Moses Atwiine noted that the tariff was in favour of the local manufacturers as it reduces imports of refined sugar.
Previously, industrial refined sugar producers complained about a lack of market due to massive importation with
The soft drink manufacturers who according to the analyst are the major consumers of industrially refined sugar had previously complained that the price of industrial sugar US$ 1.015 (Shs 3.7 million per tonne) was already a disadvantage compared with that of imported sugar US$900 (Shs 3.3 million per tonne).
In addition, the manufacturers criticized the abuse of the existing import duty remission scheme by some industrial users who claimed higher consumption than what they use and later divert the cheap imported white sugar into the retail market.
“The abuse of the import duty remission scheme has affected the export market for the light brown and brown sugar within EAC partner states hence causing a big challenge to the entire sugar industry,” a report from the government officials stated.
The report noted that the government has in recent years promoted local production of refined sugar purposely for import substitution, creation of jobs and industrial linkages.
“It is expected that more industrial sugar producers will now come on board since there is now an appropriate policy in place to protect them from imports.”
According to government officials, the available refined industrial sugar stocks are enough to supply the local market needs and no single product has gone off the shelf because of lack of sugar.
In 2020, during the inauguration of the country’s first Sugar Industrial plant, Uganda’s president highlighted that the country was losing US$50 million through importing refined sugar.
The white sugar refinery had installed a capacity of 60,000MT per annum before expanding the refinery to produce 75,000MT per annum in early 2023.
However, the refinery is reported to have exported more refined industrial sugar than what has been sold locally.