Vice president Edward Kiwanuka Ssekandi has said Cabinet will revisit the proposal to tax both agricultural inputs and produce.
Mr Ssekandi was responding to complaints by several farmers that the proposed 18 per cent VAT on agricultural products and inputs in the 2014-2015 Budget is unfair and would undermine transformation of agriculture in the country.
He was touring various agricultural crop farms in Sebei region on Wednesday. Mr Ssekandi said Parliament has not yet passed the 2014-2015 Budget and the farmers’ worry is still a subject of debate.
During the reading of the 201415 Budget last month, Finance minister Maria Kiwanuka announced an 18 per cent VAT on agricultural inputs and products. The proposal has since attracted raging objections from farmers, members of Parliament and other stakeholders in the agricultural value chain who say the tax should be removed.
Mr Juma Seiko, chairperson of Sebei Cooperative Union, said the tax would hurt agriculture because most farmers are still producing at subsistence scale and it will make farm inputs more expensive.“Government should pass over the 18 per cent tax to the middlemen who are making abnormal profits. They pretend to be selling the products on behalf of the farmer but they are instead robbing the farmer of his profit,” Mr Seiko said.
But Mr Ssekandi said the Budget was still being debated at both Cabinet and Parliament levels and that he will present the farmers’ concerns to Cabinet and persuade his colleagues to address the tax concerns.However, he reminded the farmers that government cannot survive without taxes. He said although the tax can be revised, it cannot be waived as they are demanding.
Mr Tom Chemusto, farm manager for Kato Company, which has about 1,800 acres of simsim, said government should speed up the agricultural fund to enable farmers get loans to start commercial farming. “All the crops you see here are privately grown on small scale for subsistence consumption. Government should therefore introduce agricultural loans to commercialise agriculture,” Mr Chemusto said.
SOURCE: Daily Monitor