Uganda: Parliament reduced taxes on non-malt beer from 30% to 20%

Uganda Parliament has slashed taxes on non-malt beer by amending the Excise Tariff Amendment Act, All Africa learned September 15 from The Monitor (Kampala).

The decision to reduce the taxes was taken September 14 in a sitting at which Parliament passed the Excise Tariff Amendment Bill 2006. The house adopted recommendations of the Committee on Finance, Planning and Economic Development.

The committee said the new tax rates as had been proposed by the government would hurt the economy in different ways.

In its report, the committee had recommended that the 30% tax on non-malt beer be reduced to 20% because if left at the proposed rate, it would increase production costs and eventually lead to reduced consumption.

The committee also observed that the non-malt beer brewers would in effect pass on the cost by reducing the amount of money paid to farmers who produce the non-malt beer raw materials such as sorghum. Materials for malt beer are imported while non-malt beer is made from locally grown sorghum.

Members especially from sorghum growing areas in the north and east said the high levy would be counterproductive to the government policy of poverty eradication in rural areas.