Ugandan cement manufacturers have asked the government to look into its decision of tax introduction towards the. It has been a lament for the manufacturers who have always decried the implications of tax in their business. High tax have brought adverse crippling repercussions into business, as they distort the financial managements and expectations of the producers.
The producers say the new 10 per cent levy on clinker imports is likely to increase the prices of cement which currently range from shs28,000 to shs30,000.
Mr BM Gagrani, the executive director Tororo Cement, in a letter to the Uganda Revenue Authority and the ministry of Finance explained that Tororo Cement processes minerals with value addition into clinker and finally to cement.
“The manufacturing of clinker has the limitation due to the limited availability of cement grade limestone minerals a basic raw material used in the manufacture of cement.
“We, therefore, need to import part of its requirements to manufacture quality cement for domestic construction and accommodate mega construction projects,” he said.
He said the additional levy of import duty on clinker will have a direct impact on the cost of cement.
He revealed that Tororo Cement had invested a lot of money as a company into expansion on grounds that imported clinker was exempted from duties and that it would be futile to invest in a fully intergrated cement plant capable of producing clinker owing to inadequate locally available raw materials.
Uganda Manufacturers Association then acting executive director Mubararaka K. Nkuutu, in a letter to the minister of Finance, Mr Matia Kasaija, on behalf of the cement manufacturers asked the ministry to protect local cement manufacturers.
However, Mr Kasaija, while speaking in an interview, said government is encouraging production of clinker in the country.
However, he said all industrial inputs are imported tax-free but the remission on clinker was added this financial year.
“We have not changed our mind on that. My people went and put up a tax and it escaped the eye of everybody but we are working on resolving it and we shall rectify this issue in the coming financial year,” he said.