August 6, 2013

UEPB: Preferential Tax Rates a Good Incentive for Local Exporters

Uganda Export Promotion Board (UEPB) is encouraging local exporters to take advantage of the Preferential Trade Agreements that give opportunities to traders and allow them to access regional and international markets.

However, the board says exporters must acquire specific documents and meet certain trade terms, to benefit from preferential tax rates.

Uganda is party to COMESA, ECOWAS, EAC, AGOA and Economic Partnership Agreements (EPAS) which covers 7 European Union states.

According to Noreen Kamoti, Acting Director Management Information Systems Division at the Uganda Export Promotion Board (UEPB), exports have to meet tough standards to compete on these market regimes.

In an interview with Uganda Radio Network, Kamoti said, export products must either be wholly produced in Uganda, have material content that constitute a maximum of 60% foreign raw materials and a minimum of 40% local content.

In order to meet the value addition component, exporters must ensure that when raw material is imported and converted into finished products, it should constitute 30% in ex factory input.

Kamoti says that the exporters also need to have a   certificate of origin, document evidence that is used to claim the preferential tax rates or zero export tax.

Mashamba, a fresh produce export company based in Kamokya a Kampala suburb, is already benefiting from this preferential treatment.

Mashamba was founded in Ostend, Belgium 2008 under Icemark Africa with the need to fill up cargo shipping produce to Europe.

It gets produce from 20 individual farmer groups. Kristjan Erlingsson Managing Director at Mashamba says the Export Company was created to fill a gap in fresh fruits and vegetable that was on high demand on the European market.

In 2010 Mashamba exports were recorded at 1.2 million tons with a turnover of 1.5 million USD; however they fluctuated to 400, 000 tons getting 1 million USD in 2011.

Betty Kabahenda, General Manager at Mashamba, is optimistic that despite the dry spell, the market performance is still constant, but comparative to other players they could still do better.

Mashamba exports fresh, hot pepper, Matooke, bird eye chili, okra, sweet potatoes, avocado to England, France, Spain, and Belgium, Holland, Swiss, Denmark, Sweden, Italy and Germany.

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