Kampala, Uganda — Ugandan business people are unhappy with the new 1.5% Railway Development Levy that Kenya introduced in its budget estimates for 2013/14. The charge came into in June.

Through their umbrella body, the Uganda Manufacturers Association (UMA), Ugandan importers have expressed concern that the transport costs will rise and this has to be passed on to the consumer in higher prices.

Recently, Kenyan oil dealers also complained about the cost implications on their business model with the new levy.

Speaking during meeting organised by the East African Business Council in Kampala last week, Godfrey Ssali, the Policy and Advocacy officer for UMA said,

"Another issue is the Railway Development Levy of 1.5% for all imports through Kenya introduced by the government in the 2013/14 National budget for the development of the Kenyan railway network. But is being paid by all States and importers using the Mombasa Port or transiting through Kenya," he said.

"To UMA, this is unfair, as the rail development won't be implemented in all East African Community Partner States and other users like South Sudan and Eastern Democratic Republic of Congo whom are all paying the levy," he said.

In June, Henry Rotich, the Kenya Treasury Cabinet Secretary, announced he was seeking an amendment to the Customs and Excise Act to introduce a 1.5% charge on all imported goods to raise some Ksh15 billion.

The money is going towards building a new standard gauge rail line between Mombasa and Kisumu. Some $260 million has already been budgeted for.

Tenders are to be opened towards the end of the August, but the Chinese are the frontrunners.

Ssali spoke out on other key policy issues affecting its members requiring urgent redress at regional level.

He said that these include the Tax Remission for Exports Office (TREO).

UMA claims the Kenya government through the Tax Remission for Exports Office encourages local manufacturers to export their products. This is achieved by remitting duty and VAT on raw materials used in the manufacture of goods for export.

UMA thinks exports under the TREO scheme shouldn't be within the EAC but outside the EAC since the region is now a Common Market and Customs Union. The impact of the remission on duties and VAT gives Kenyan manufacturers a better competitive edge as compared to those within the other EAC states.

Another issue was the denial to carry cargo in Kenya by Ugandan Transporters. Kenya denies Ugandan transporters the right and access to carry cargo and merchandise in Kenya. This isn't in the spirit of free movement of goods and products within the EAC and Kenya should open up to allow other regional transporters and conveyors.

The manufacturers raised the issue of visa and Yellow fever vaccination requirements with Tanzania.

Tanzania still insists on the visa requirement for EAC nationals travelling into Tanzania as well as demanding the Yellow fever vaccination certificate.

UMA is also unhappy with what they consider an excessive number of weighbridges. UMA says these are delaying the transit transport times when plying through Kenya as well as failing to comply with the EAC agreed position of the use of gross weight as opposed to the axle weight.