Home / Business

Kenyan potato traders stuck at border as Uganda enforces new tax policy

Bags of irish potatoes in a Kenyan farm.

By Bashir Mohammed | 18 Apr 2024

The implementation of the tax, according to importers and clearing agents, was "hurried" and "too high" for them.

A standoff at the Busia border crossing has left trucks from Kenya loaded with Irish potatoes destined for Uganda stuck after the Uganda Revenue Authority (URA) doubled withholding tax on products.

The dispute has caused a massive backlog of vehicles, sparking fears that the perishable cargo could spoil, leaving traders counting losses."

Keep reading

The new tax policy, which came into effect on April 12, has pushed the levy higher by at least 10 times, leaving importers counting losses.

According to importers of Irish potatoes from Kenya, they have been paying a withholding tax of Ush120,000 (about (Sh4,190) for each truck. Now, URA, they say, requires them to pay Ush1,200,000 (Sh41,905) per truck.

However, URA refutes this claim, asserting a 6 per cent tax with a customs value of $0.4 (Sh1,560) per kilogram of Irish potatoes imported into the country.

"We have reviewed and increased the withholding tax on Irish potatoes coming into the country, but not to the value the importers are talking about," said Ibrahim Bbosa, URA Commissioner for Public and Corporate Affairs.

The implementation of the tax, according to importers and clearing agents, was "hurried" and "too high" for them.

"Whereas URA was saying it had increased the tax from Ush9 to Ush93.6 per kilogramme of Irish potatoes imported into the country, the trucks that were impounded in Jinja had paid Ush1,560 on each kilogramme," said Haji Ali Mande, Chairman, Uganda Clearing Agents and Forwarding Association Jinja branch.

The new tax policy has also raised fears of retaliation from Kenya, which is Uganda's leading trading partner. Kenya has in the past imposed bans on Ugandan goods, including sugar, sugarcane, maize, milk, and eggs.