The Ministry of Trade, Industry and Cooperatives has banned exportation of raw materials starting this financial year.
During a press conference last week, the State Minister for Trade, Ms Harriet Ntabazi, said 69 per cent of raw materials in the country are exported hence causing revenue loss, adding that the move will improve the manufacturing sector.
She said the ministry has negotiated a Shs100b loan from development partners and sourced another Shs100b given to Uganda Development Bank this financial year to give to traders.
“Government has banned exports of unprocessed raw material starting this financial year to encourage adding of value on all raw materials before exporting them, so this money will help traders embrace value addition,” Ms Ntabazi said.
She said the main plan of government is to turn all traders into industrialists to boost manufacturing.
Ms Ntabazi said her ministry is in discussions with Finance to give new local investors tax holidays.
She said increased taxation has affected traders yet the current lockdown has had adverse negative impacts on them.
The minister condemned the increase of taxes on garments from 25 per cent to 33 per cent by Finance ministry, adding that this affects consumption both internally and externally.
Dr Joseph Denis Walusimbi, the dean of faculty business and management at Victoria University, welcomed the move, saying it will ease the cost of doing business.
He said the country is ranked in 176 in cost of doing business in East Africa behind Rwanda 136 and Kenya 150.
“This move will impact positively on strengthening regional and international trade for creating a conducive atmosphere of doing business,” Dr Walusimbi said.
He added that raw material exports are bought at a low price, but are three times the price when imported as a finished product .
Allafrica
