The Uganda Manufacturers Association (UMA) has proposed a 25% export levy on all raw grains to curb scarcity and promote local value addition.
The proposal is contained in an April 28 communiqué signed by UMA executive director Dr Ezra Muhumuza Rubanda.
The statement, seen by New Vision, was submitted to Parliament in response to a raft of various bills currently before Parliament’s finance committee chaired by Rwampara County MP Amos Kankunda (NRM).
These include the External Trade (Amendment) Bill, 2025, which proposes to insert a $0.01 (about sh36) per metric tonne export levy on wheat bran, cotton cake and maize bran immediately after Section 4 of the Principal Act.
The levy shall be paid to the Uganda Revenue Authority when the aforementioned produce is being consigned out of the country.
However, Rubanda contends that the fee is insufficient and narrow in scope. Instead, they want a more stringent charge slapped on all other raw grain exports such as soya beans and sunflower grain.
“The export of these specific raw materials is a major cause of scarcity of inputs for domestic industries such as cooking oil and animal feed manufacturers, leading to factory closures. The proposed levy of $0.01 per metric kilogramme is too negligible to achieve the goal of discouraging exports of unprocessed grains,” he said.
Rubanda argued that this amount is insufficient compared to current market prices, where, for example, maize goes for sh1,400 per kilogramme.
UMA also opposed provisions within the law to impose an infrastructure levy on imports for home use.
The argued that since Uganda is landlocked, any tariffs on imported goods used in the manufacturing sector would backfire economically.
UMA pointed out that a comparative assessment shows that Tanzania, with access to the sea, has a lower charge compared to that being proposed by Uganda.
Mukwano petitions the president
In a letter, dated March 7, 2025, through the Government Chief Whip Denis Obua, Mukwano Industries (U) Ltd implored President Yoweri Museveni to intervene on the exportation of grain, which, they said, is greatly affecting the local manufacturing sector.
“In 2024, Mukwano had to shut its Lira factory for over three months due to a grain shortage arising from unprocessed soya beans being taken to Kenya. During the second season of 2024, we saw Tanzania also entering our market and taking away most of our sunflower grain. Whilst Kenya continued taking our soya beans, Rwanda joined,” Alykhan Karmali, the Mukwano Industries (U) Ltd managing director, told the President in the letter.
Karmali revealed that they are aware that in the Finance Act of 2023/2024, the Tanzanian government imposed a 10% export levy on the export of sunflower grain and crude sunflower oil and that later Malawi and Zambia implemented similar restrictive tax laws.
Calling for the formalisation of Uganda’s grain trade, Mukwano argues that there is a thriving plethora of traders, who do not pay taxes and have created a monopoly by buying and hoarding to drive up prices and sell to the highest bidder.
Proposing the need to tax raw grain exportation, Mukwano Industries (U) Ltd’s management said: “This will safeguard Uganda against the transfer of its foreign exchange earnings from value added products, jobs, processing capacity, opportunities for growth as well as taxes and all other earnings in the supply chain in exchange for the peanuts the country earns in exporting raw grain.”
Mukwano Industries Uganda Ltd employs over 7,000 staff directly and indirectly within their various companies and is among the top 10 largest taxpayers in Uganda.
President Museveni has beenrelentlessly imploring various stakeholders in the country to invest in value addition and reduce the exportation of raw products to improve export earnings and create more jobs.
Starch manufacturers
also want the Value Added Tax (VAT) Act amended to include high-quality cassava flour among the zero-rated products.
The others, at the moment, include grains, cereals grown and milled in Uganda.
Rubanda said this would significantly reduce production costs and encourage value addition as well as sector growth.
Stakeholders speak out
The same sentiments were shared by Kelly Wanda, the chairperson of the National Cassava Platform of Uganda, while appearing before the parliamentary finance committee recently.
Wanda said the existing 10% import levy has failed to tame the influx of cheaper starch from countries like India, Egypt and Thailand, something that is making locally produced starch uncompetitive on the market.
“Egypt uses grains imported into the region, then it exports here. VAT on cassava starch would enhance the competitiveness of Uganda’s starch industry within the East African Community, the Common Market for Eastern and Southern Africa, plus within Africa, leading to more exports, import substitution and employment,” he argued.
“This leads to a higher value of revenue from corporate tax because you will have many people setting up investments.”
Cassava is a major raw material in the manufacture of starch, ethanol, glucose, sorbitol and monosodium glutamate, among others. It is also used for packaging, paper boards and in copper smelting.
The root tuber, which until yesterday was a staple for many Ugandans, is fast becoming a vital source of foreign exchange.
Uganda now has the largest number of cassava-based industries in East Africa, with four factories in operation.
If given priority, experts say, the sector could save the country up to $343.9m (sh1.3 trillion) through import substitution. The Government needs to mobilise and empower farmers to grow more cassava to utilise in various new markets that have emerged.
Parliament is in the final stages of scrutinising and making consultations on the 2025/2026 national budget proposals from the Executive, which include a set of various proposed taxes aimed at improving revenue collections.
Beer tax
The Uganda Manufacturers Association is also opposed to amendments in the Excise Duty (Amendment) Bill 2025, which seek to increase excise duty on beer made from local raw materials from sh650 to sh900, saying this will have a ripple effect throughout the agricultural value chain.
“In such a scenario, more than 25,000 smallholder farmers growing sorghum and barley across 114 constituencies in the country would face declining demand,” the manufacturers argue.
The manufacturers note that if passed in the current form, an estimated sh45b in annual farm income would be lost as breweries scale down grain purchases by approximately 30%.
“The brewing industry contributes 1.3% to Uganda’s gross domestic product, supports 170,000 jobs and generates $1.2b [sh4,4 trillion] in tax revenue [15.9% of total national tax collections],” the manufacturers argue in their paper.
“Evidence from Tanzania shows that similar excise increases resulted in 34% volume decline in sorghum beer sales, significantly reducing expected tax revenue while driving a corresponding 34% increase in untaxed illicit alcohol consumption,” Rubanda argued.
As such, they want the law to remain as it is to avoid any inadvertent consequences.
