According to the latest news from the Africa, it has been indicated that the Commercial Court of Uganda has defended the imposition of value added tax (VAT) of 18% on milled rice imports. Responding to a petition by some importers that VAT should be applied on only locally produced products. However, the Judge noted that imported rice does not fall within the confines of the VAT Act. The imported rice is also not enlisted under those exempted imports set out in East African Community (EAC) Customs Management Act.
Further, having considered the literature together with the evidence on record, it is my finding that the value of the added activities such as drying, hulling, milling, polishing, sorting, grading, and packaging, among others, exceed 5 per cent of the total value of the supply of rice imported by the plaintiffs, as quoted by the Judge. Furthermore, in this regard, it has also been narrated that the Uganda began imposing 18% VAT on imported rice since 2007. The Uganda produces only 65% of the rice needed for its annual consumption and imports the rest. Like other African countries, Uganda is also aiming to increase local rice production and to reduce imports. Further, as per the USDA estimates, the Uganda has to produce around 150,000 tons of milled rice and import around 120,000 tons in MY 2015-16 (May – April) to meet a consumption demand of around 230,000 tons.