Ura Installs Rice Testing Machine at Mutukula Border Amid Numerous Interceptions of Tax Evasion

URA Acquires Advanced Machine to Test Imported Rice

The Uganda Revenue Authority (URA) has recently acquired an advanced machine to test imported rice at the Mutukula border. This machine will play a crucial role in determining the country of origin of imported rice, specifically focusing on rice imports from Tanzania and other countries outside the East African Community (EAC).

It has come to the attention of the URA that some traders have been importing rice from countries like Pakistan and falsely declaring it as Tanzanian rice to evade import duty taxes. Importing rice from outside the EAC attracts a high Import Duty of 75%, while rice imported from EAC member states is not subject to any import duty tax.

The URA Commissioner in charge of field services explains that their customs office at the Mutukula border has suffered losses due to rice traders avoiding the declaration of mixed rice imported from Pakistan. These traders ship the rice to Uganda through the Dar-es-Salaam port in Tanzania, claiming it as Tanzanian rice to avoid import duty taxes.

He further states, “Rice imported from countries within the EAC is exempted from import duty tax, only requiring a withholding tax of 6%. However, many traders have been evading this tax. Therefore, we have introduced this machine to protect the interests of local rice producers and ensure fair trade among the East African countries.”

Cracking Down on Rice Importation Fraud

To crack down on the rice importation fraud, URA officials at Mutukula Town intercepted over 100 trucks of rice on October 31. These trucks were claimed to be carrying rice imported from Pakistan instead of Tanzania. The traders were trying to dodge import duty taxes.

Rice traders strongly protested against the URA’s decision, asserting that the imported rice was indeed from Tanzania, not Pakistan. They even presented documents as evidence of the rice’s origin. In response, URA officials held a meeting with the rice traders and long-distance truck drivers on November 2.

During the meeting, agreement was reached that upon arrival at Mutukula border, samples of rice would be taken for laboratory analysis to determine their origin. Rice that passes the tests will be allowed into the country after paying a 6% withholding tax. On the other hand, rice that does not meet the requirements will be subject to both import duty tax and withholding tax.

Promoting Fair Trade and Protecting Local Rice Producers

The acquisition of this advanced machine by the URA marks their commitment, as well as that of Tanzania, to adhere to import regulations and prevent revenue losses. By ensuring proper identification and declaration of the country of origin for imported rice, both countries aim to promote fair trade and safeguard the interests of local rice producers.

The Mutukula border post has experienced a significant increase in transit cargo volumes since becoming a one-stop-border-post in 2017, operating 24 hours a day. This border post handles transit goods, passengers, travelers, and exports exiting to either Tanzania or Uganda. All these activities require clearance by immigration and customs officials.

Conclusion

The URA’s acquisition of this advanced machine will help combat rice importation fraud and protect local rice producers in Uganda. By accurately identifying the country of origin for imported rice, fair trade can be ensured among the East African countries. The URA and its Tanzanian counterparts are committed to implementing import regulations and preventing revenue losses. Together, they aim to create a transparent and thriving rice industry that benefits all stakeholders.