The country Managing Director for Nile Breweries Limited, David Valencia has asked relevant authorities to put in place regulations and policies that support and protect the beer industry against unfair competition and disarming tax laws.
Making a presentation on ‘how can tax regime stimulate post covid19 investments’ at the ongoing Uganda Economic Forum, Valencia said that the beer sector is a big and global sector that is contributing to the economic development of the country and hence the need to create a levelled field for the sector to thrive.
“The main challenges that are facing the beer sector right now are digital tax stamps and illicit alcohol. Despite government banning sachets and implementation of tax stamps, fiscal leakage from illicit alcohol has accelerated. The value of this illicit trade in Uganda is nearly $1 billion not taxed and 1.6 times larger than in 2017,” he said.
“Total fiscal loss from illicit trade was estimated at $458 million in 2020, a 29% compounded growth rate since 2017. In practical terms, fiscal loss due to illicit alcohol doubled in 2020 versus 2017. This loss dwarfs actual collections from the formal sector.”
Valencia urged government to increase the competitiveness of formal players by eliminating digital tax stamp and enforcing the stamp on the illicit, increased control in the distribution of ethanol, track sources and usage, set a minimum price floor for packager spirits to decrease consumption of illicit, increase penalties and punishment of illicit players and those retailing and put in place deliberate and sustained enforcement.
The UG Economic Forum is an annual convening organised by NBS TV in partnership with Nile Breweries, Uganda Revenue Authority, Uganda Development Bank, Uganda Development Commission, Ministry of fiancé among others.
The forum is aimed at bringing together key stakeholders from the private sector, innovators, government, civil society, academia and the media for a constructive exchange on the impact of COVID-19 and what lies ahead including opportunities and challenges for Uganda’s economy in the 2022/2023 financial year.
While opening the forum for day two on Tuesday , the Minister of State for Trade, Harriet Ntabazi promised that government is working on creating a conducive atmosphere for businesses to thrive.
She however she stressed the need for quality products and consistent supply by the manufacturers and traders as one way of increasing their competitiveness.
Gerald Namoma, a senior economist at the Ministry of Finance said there was need to formulate policies that support investment.
“A lot of the policies that we put in place are not aimed at increasing taxes but addressing some of the challenges that manufacturers like Nile Breweries highlighted. Amidst a number of challenges, we are on course to improve on our tax and revenue policies” Nanoma said.
The UG Economic Forum provides a unique platform for the private sector and government to theorize dialogue and create practical solutions to the growing relevance of economic revival and how it shapes social, Economic-Political interactions to achieve economic growth.