Uganda: Nile Breweries forced to close Chibuku production line because of excise hike

Nile Breweries Limited (NBL) has said they have been forced to close their Chibuku production line because of the 30 per cent excise duty, which has been slapped on the brew, the Daily Monitor reported on July 9.

In a telephone interview on July 8, Mr Onapito Ekomoloit, the NBL director corporate and legal affairs, said they were forced to shut down the production line because government failed to honour the tax holiday it had promised them when they were setting up the factory. Mr Ekomoloit said government has instead been taxing them for the last five years.

“We have spent five years telling government that this product is competing with the illicit brew such as malwa and sachet waragi but unfortunately, tax was introduced on opaque beer and we cannot compete with beers such as Senator, Eagle, and Ngule,” he said.

Mr Ekomoloit explained that the Chibuku brand was specifically meant to help government get rid of illicit beer, which is not taxed.

“We had more than 1,000 farmers supplying us maize and unfortunately, these have had to lose jobs because it was our major input. We were almost stabilising the maize prices like we have done with sorghum but government does not listen to manufacturers when they raise complaints,” he said.

Mr Vincent Seruma, the head of public and corporate affairs at the Uganda Revenue Authority, said he needed to crosscheck and find out the facts before he can make an official comment.

Mr Jim Mugunga, the Finance ministry spokesperson, said he was not privy to the tax regime under which that particular investment was negotiated.

“Government is not known to renege on its promises because it is a known secret that government is promoting investment by most times extending tax and other incentives unless the other party fails to meet their bargain,’ he said.

NBL is part of Belgium-based world’s number 1 beer maker AB InBev.

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