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Cane Farmers Reject Taxation By URA

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Masindi sugarcane farmers have called on government not to deduct taxes on their income returns while receiving payment for cane supplied to Kinyara Sugar Limited (KSL).

Under their umbrella organisation, “Masindi Sugarcane Growers Association Limited (MSGAL),” farmers said they are working towards poverty eradication and need government support.

“URA has been sending text messages to us alerting us about probable income tax. Since we all have Tax Identification Numbers (TIN), it becomes easy for government to monitor our accounts but we request that the taxation idea be dropped,” Patrick Byamukama, the secretary of MSGAL, said.

Byamukama said farmers incur a lot of taxes especially when buying agricultural inputs, withholding tax when cane is cut by Kinyara, amongst others.

“Charging us again would be double taxation and it will affect farmers negatively,” Byamukama said.

Meanwhile, MSGAL’s chairperson Robert Atugonza said government might also be affected negatively if such a tax is imposed.

“If such a tax is imposed, Kinyara might lose out on cane supplied while government will also receive less revenue because most farmers will start selling cane informally in order to beat the regulation,” Atugonza said.

Atugonza said the association leadership has been making different calls to farmers to respect the cane supplying contract signed with Kinyara but some measures might force others to break it and sell to other cane brokers in order to avoid taxation.

“A farmer waits for close to two years to get paid and that comes with a lot of patience. The price of cane has also been inconsistent and there is need to diversify and avoid sole dependency on a single source of income,” Atugonza said.

Meanwhile, Kinyara Sugar Limited on Monday announced a top-up of sh27,000 per tonne of sugarcane supplied by farmers bringing the current price to sh128,000 from sh101,000.

In July, 2022, Kinyara and MSGAL had negotiations and placed the cane price for FY 2022/2023 at sh101,000 per tonne but according to Kinyara’s Agricultural manager Masilamani Mathivanan, different factors have prompted a review.

“Sugarcane price was increased in other parts of the country. At the same time, the price of sugar has also been increased in the market,” Mathivanan said.

Mathivanan said all those who supplied cane between July 1st and September 19th, 2022 would be paid a top-up of sh27,000 by November 30th, while those who started supplying from September 20th are meant to get returns as per the current price as announced on Monday.

“We are going to pay about sh11b to farmers who supplied us between July and September 19th. Farmers should know that this is their hard-earned money and they should not misuse it because it is not free,” Mathivanan said, advising farmers to get at least 30% of the same and invest it back in their fields in order to improve yields.

Meanwhile, Atugonza said the increment is not final because more negotiations will continue but advised farmers to ensure they focus on better agronomic practices such as proper field maintenance.”

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