10 February 2013

Uganda: Taxes Hurting Agoa Initiative - Muhwezi

Business entities operating in northern Uganda have expressed dismay at the rampant taxes levied on them describing them as an impediment to the promotion of the African Growth and Opportunity Act (AGOA).

AGOA is an initiative that allows products from Sub Saharan African countries into the US market duty and quota free.

The business personalities mainly Small and Medium Scale Entrepreneurs (SMEs) expressed their concern during a meeting with Suzan Muhwezi the Senior Presidential advisor on AGOA.

They urged government to remove taxes on their products if they are to benefit from the AGOA initiative. Jared White one of the entrepreneurs making crafts for export to the US said the costs of production in making the bags, beads and necklaces was a challenge to them.

"Our biggest problem has been getting raw materials for making the products as well as the high taxes on them," said Jared White, the Social Enterprise Director of MEND, a social and financial enterprise that makes high-quality bags.

"We are not benefiting from AGOA because we are paying taxes," said Sean Galaway, the Country Director Krochet Kids Uganda an enterprise that produces hats for the US market.

The bags that go for US$250 in the US are made from locally procured raw materials.

Muhwezi was on a fact finding mission in Gulu district last week said she was impressed that the rural women in northern Uganda were the brains behind the great bags exported to the US.

"I am so happy that AGOA is taking center stage in Gulu with the grassroots women making crafts. But I am surprised that they are paying taxes," she said.

She noted that AGOA being a duty free and quota free initiative would not advocate for any payment of taxes. She promised to work out with the Ministry of Trade to ensure that the women entreprenuers get back their refunds.

She noted with great amazement that the crafts made by former LRA abductee at MEND are being sold in more than 200 exotic boutiques in the US and Canada. The Gulu district chairman Ojara Mapenduzi, said the local business groups had boosted the community socially and financially.

Uganda is yet to benefit from the AGOA initiative 13 years since it came into force.

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