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Ian Rumanyika

Textile Taxes: URA Clarifies on Containers Pending Clearance

In an August 4 letter, Finance Minister Matia Kasaija advised that that textile fabrics and garments that are not manufactured in Uganda and cannot be adequately sourced locally get an import levy of 35%, while textile fabrics and garments that are manufactured within Uganda and can be adequately sourced locally hold an import levy of 35% or a specific duty rate of $3.0 per kg for textile fabrics and 35% or $3.5 per kg for garments.
posted onAugust 30, 2021
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Uganda Revenue Authority (URA) said 125 containers are pending clearance for taxes, dismissing the figure the spokesperson of Kampala City Traders Association (KACITA) told the Saturday Vision.

"The Saturday Vision on 28/08/2021 reported that 700 containers of textile/garments are stuck at URA, quoting the Spokesperson of KACITA. A figure that is far from the truth," Ian Rumanyika, the Authority's acting commissioner of public and corporate affairs, said in a Sunday statement.

"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."

For the current financial year, the government raised the import duty rate of garments from 25% to 35% or a charge of $3.5 for every kilogram and for textile fabrics, it was increased to 35% or $3 per kg.

In an August 4 letter, Finance Minister Matia Kasaija advised that that textile fabrics and garments that are not manufactured in Uganda and cannot be adequately sourced locally get an import levy of 35%, while textile fabrics and garments that are manufactured within Uganda and can be adequately sourced locally hold an import levy of 35% or a specific duty rate of $3.0 per kg for textile fabrics and 35% or $3.5 per kg for garments.

According to the Sunday statement, the minister’s recommendation is what is being followed but KACITA says the taxes are high which is why some traders had failed to pay for clearance of their goods.

The traders are planning a protest, by closing their shops, starting September 1.

According to Rumanyika, some traders have complied with the taxes and from August 18, 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.”

“This number is expected to grow as more traders realize that the rate has been maintained as it was last financial year,” he said.

The Authority says the taxes are aimed at boosting the manufacturing and export sectors.

“Textiles have proved to be one of the most critical sectors in job creation in Africa. An example is Ethiopia, where the sector employs more than 2.5 million people, with women accounting for 70 percent,” he said.

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