Although President Museveni declared in his latest Budget Speech, that his government is to adopt import substitution as a strategy of economic transformation by encouraging the manufacturing of goods locally as opposed to importing them from China and other countries, the reality seems to betray this commitment.
The latest evidence has come from manufacturers of textile products by converting the imported garments into finished clothes.
Textile manufacturers say that Uganda Revenue Authority (URA) has hiked import duties on textile garments by 1000 percent.
As Bridget Mwagale, who led a team of textile traders explained to Speaker, the Government has increased the import duty tax from UGX40 million to UGX400 million per container measuring 20 feet.
The group made their plea in a petition to the Speaker of Parliament Rebecca Kadaga, in which they complained that the new charges will drive them out of business let alone kill hundreds of thousands of jobs in the tailoring and fashion industry.
The changes come at a time when the textile industry was beginning to gather momentum as a major employer shown by the changing attitudes among Ugandans in favour of buying locally produced garments such as Kitenge dresses as opposed to buying ready-made clothes imported from China or Second-hand clothes.
Indeed, the tax hike appears to contradict the government’s own strategy of creating employment especially among the thousands of young women who were skilled across Kampala and Wakiso under the Presidential Initiative on Skilling the Girl Child.
“In the new tax, we are charged US$5 per kilogramme of the textile. The fabric we import is very heavy. If we are to measure it in kilos, there is no way we can make profit after selling to the end user,” she said.
The petitioners met the Speaker at Parliament on Friday July 24, 2020. The meeting was attended by Kampala Central MP Muhammad Nsereko, who had also raised the concerns during the plenary sitting the previous day July 23, 2020.
She added that they import fabric from China because it is not available in the Ugandan textile manufacturing industries.
“We are trying to promote government’s policy of Buy Uganda, Build Uganda by importing raw materials and add value by tailoring and selling to Ugandans,” she said.
Speaker Kadaga pledged to follow up the matter with the Commissioner General of Uganda Revenue Authority.
“I will meet the Commissioner General with the Minister of Finance to find a way forward,” she said.