Beer Manufacturer, Nile Breweries Ltd has commended government for increasing agriculture budget for the financial year 2024/2025 budget.
Nile Breweries Ltd Head of Legal and Corporate Affairs Emma Njuki says the boost will enhance agriculture production since agriculture is the biggest employer of Ugandans.
” We wish to commend government for increasing agriculture budget in the financial year 2024 /2025 budget. Agriculture is the back of Uganda’s economy and government has invested in the real sector that employs vast majority of Ugandans therefore we expect increased food production in the country,” Njuki said.
According to the new budget that starts in July Agriculture sector was allocated shs 1.8trillion making it the first biggest allocation since Nrm came to Power.
Njuki however requests government for tax waiver to boost beer production chain in Uganda.
“We spend every season shs 50billion to support 25,000 farmers to grow barley and sorghum for beer production in form of seeds, fertilisers and other farm imputs. This is innadfition to shs 90billion we use to purchase all the products from farmers for our beer production hence facilitating farmers business,”
According to Njuki this tax waiver will counteract entry of illicit alcoholic in the market that commands 65% market share in Uganda.
” Our biggest challenge and akiller is to the constant entry of illicit alcoholic in the market, “Njuki stressed.
During budget reading Finance Minister, Matia Kasaija announced taxation measures targeting the alcohol industry, particularly imported brands of beer and wine.
While some analysts had suggested that, the budget for the financial year 2024/25 was not too “tax laden” the Minister slapped a one thousand shilling on each kilogram of powdered bear.
This alcohol exercise tax is likely to affect the final price of this type of beer. Powered beer has recently been a beer of choice by some revelers in some of the top bars and clubs. Unlike the bottled beers on the market, the powder imported from countries like Germany instantly turns into beer once mixed with water.
The Minister also announced an increase in excise duty on imported wines from 80 percent or Shs 8,000 per litre to 100 percent or Shs 10,000 whichever is the highest.
Players in the breweries sector have in the past raised alarm about exercise duties on beer. Current beer made from malt has a 60% duty or UGX 2,050 per litre, whichever is higher, opaque beer, 12% or UGX 150 per litre, whichever is higher.
In March, Uganda Breweries Managing Director, Andrew Kilonzo warned against the plans by the government to impose a 20 % tax increase on both locally manufactured and imported spirits.
He revealed that Uganda’s exercise duties on spirits were twice those in other East African countries.
Kasaija did not mention new exercise duties on the spirits meaning that the old ones still stand.
Some civil society actors have in the past warned the government against such blanket tax holidays saying they normally end up denying the country access to revenue.
Uganda Revenue Authority has indicated that the country loses about Shs160 billion annually due to foregone Corporate Income Tax mostly from multinational companies because of tax holidays.
”We have extended the waiver of penalties and interest on arrears outstanding by June 2023. This waiver will apply when the taxpayer pays between July and December 2024, and we have also introduced a 10 percent withholding tax on commission paid to the banking agents and fintech agents (payment service providers),” Matia Kasaija said.
According to the Minister, Uganda’s total public debt stood at Shs 93.38 trillion, equivalent to USD 24.69 billion. Of this amount, external debt was Shs 55.37 trillion equivalent to USD 14.64 billion while domestic debt was Shs 38.01 trillion equivalent to USD 10.05 billion. The public debt is projected at Shs 97.638 trillion, equivalent to USD 25.716 billion by 30th June 2024.
He said that in nominal terms, Uganda’s public debt to GDP was estimated at 9 percent in June 2023, and is projected to end at 47.9 percent this financial year ending June 2024.
“ This is below the52.4 percent threshold provided for in the Charter for Fiscal Responsibility for the financial year 2023/24, and less than 50 percent of GDP Government policy target for debt sustainability,” he said.
Kasaija however says although Uganda’s debt has increased, it is still sustainable and the Government is committed to keeping it sustainable.
