By Simon Abaho
The Uganda Uganda Revenue Authority (URA) has said that textiles and garments which are not manufactured in Uganda and as such cannot be adequately sourced locally have been maintained at an import duty rate of 35%.
URA has also clarified to traders that the contentious 35% import duty rate doesn’t apply to textiles and garments which aren’t manufactured in Uganda and cannot be adequately sourced locally.
URA says the hard-to-get textiles account for 90% of the clearances by the textile and garments traders.
In a clarification notice issued on Sunday, August 29, Mr. Ian Rumanyika, the URA acting Commissioner, Public and Corporate Affairs indicated that the textiles and garments that can be sourced locally from Ugandan manufacturers which account for 10% of the imports by the traders have been maintained at the rate of 35% or $3.0 per kilogram for textiles.
Mr. Rumanyika says this arrangement has been approved by the council of Ministers under Legal the East African Community.
On a number of uncleared textile containers, he says URA is in possession of only 125 containers contrary to 700 in media reports.
“We are in possession of 125 containers and so far, 9 have been cleared due to the new tax regime as pronounced by the Honorable Minister of Finance Planning and Economic Development,” he said.
“From the 18th of August 2021 to date, 9 of 125 containers have been cleared out of customs after the implementation of the Ministerial directive that removed the specific duty rate on 90% of the textiles and garments,” Rumanyika said, adding that the figure is expected to grow as more traders realize that the rate has been maintained as it was last financial year.
On why the government targeted importation of products manufactured locally in sufficient quantities, Rumanyika says the development will shield local entrepreneurs but also boost manufacturing of the same in the country.
“Uganda shall be able to promote the cotton textile value chain from cotton growing to the manufacture of fabrics that will be exported after value has been added,” he explained.
He also added that textiles have proved to be one of the most critical sectors in job creation in Africa giving an example of Ethiopia, where the sector employs more than 2.5 million people, with women accounting for 70 percent.
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