Withholding tax on coffee being charged illegally, says govt


Kampala. Government has said the law requiring a 1 per cent withholding tax on agricultural supplies that are beyond Shs1m should not be implemented until it is gazetted.
Speaking at a consultative meeting to discuss the 1 per cent withholding tax on the coffee value chain, Mr Clives Ainebyoona, an economist in the Ministry of Finance, who was representing permanent secretary, Keith Muhakaniz, said: “We didn’t know that people are already being taxed. Before we implement the tax, it must be gazetted. So for now, it cannot be implemented. Nobody should be charged,” he said.

According to Mr Ainebyoona, once gazzeted, stakeholders will be informed on the actual date of implementation, companies that will collect the tax and at what stage of the value chain it should be imposed.
Mr Ainebyoona was responding to a query that had been raised by Mr Amos Kisigi, the Uganda Quality Coffee Traders and Processors Association chairperson.

In his presentation Mr Kisigi disclosed that some people had started deducting the 1 per cent withholding tax from their coffee yet the law had not yet been gazzeted.
In his Budget presentation last month, Finance minister Matia Kasaija, said a person who makes a gross payment for agricultural supplies in excess of Shs1m shall pay withhold tax on the gross amount of the payment at the rate of 1 per cent.


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