In the border town of Mutukula, Kyotera District, a trade standstill has gripped the area since Tuesday, November 1, 2023. The Uganda Revenue Authority (URA) has impounded more than 100 trucks loaded with rice originating from neighboring Tanzania, leaving businesses paralyzed and causing traffic congestion at the bustling Uganda-Tanzania border point.
The intercepted trucks have brought normal trade operations to a halt, as traders find themselves unable to conduct their usual business activities at Mutukula border. The impoundment has sparked frustration and disruption among traders, leading to growing concerns about the economic impact of this incident.
Rice traders have raised their voices in protest, alleging that the URA is employing an inappropriate method for regulating rice imports from Tanzania. According to Patrick Ssenkima, a rice trader, the URA initially instructed all rice traders to obtain import permits and subject their rice to inspection by the Uganda National Bureau of Standards (UNBS), directives that the traders claim to have complied with. However, they express dissatisfaction with the URA’s assertion that their rice originates from Pakistan, while they insist it comes from Tanzania.
Ssenkima revealed that the URA is demanding UGX 69 million from him as import tax for each of his four trucks, amounting to a substantial UGX 276 million. Despite their disagreement with the URA’s decision, the traders are requesting the authority to either allow them to sell the rice and leave the business or permit them to return the rice to Tanzania, its place of purchase.
Aidah, a rice trader with five years of experience, stands firm in her belief that her rice is indeed from Tanzania. She personally handles the packaging and grading of her rice. However, she expresses her astonishment at the URA team’s claim that her rice is imported from Pakistan. She states that the URA is demanding UGX 86 million in taxes for the 39 tonnes of rice seized at Mutukula border.
Traders have also voiced concerns over potential financial losses. They explain that the trucks they use to transport rice from Tanzania incur daily expenses of Tshs 170,000 (approximately UGX 256,049) for hiring, in addition to fuel and driver allowances. This means that the longer the trucks are delayed at the customs office, the higher their expenses accumulate.
Ibrahim Bbosa, the URA spokesperson, acknowledges the concerns raised by the traders at Mutukula border. He reveals that negotiations are currently underway to find a resolution to the impasse and expresses confidence that an agreement will be reached soon.
Earlier in the week, the URA Commissioner of Customs, Abel Kagumire, issued a warning to rice traders against under-declaring their goods at the border points. Some businesspeople have been importing rice from countries such as Pakistan but declaring it as Tanzanian. To verify the rice’s origin, URA teams have taken samples from the rice trucks intercepted at Mutukula for testing.
It’s important to note that the importation of rice from outside the East African Community attracts a substantial import duty of 75 percent. In contrast, rice imported from EAC member states enjoys a 0 percent import duty tax. This further complicates the situation for the rice traders, who are grappling with import-related issues and financial burdens.