eprc agric inputs

Kampala, August 11 2014: Today, major Agricultural stakeholders and advocates for smallholder farmers convene in Kampala, Uganda to discuss the impact of Value Added Tax (VAT) proposed to be levied on Agricultural inputs by the Government of Uganda.

What are the implications of putting VAT on agricultural inputs? Will Uganda's smallholder farmers be able to withstand this shock? Or, are we courting a food crisis?

The Economic Policy Research Centre (EPRC) and Alliance for a Green Revolution in Africa (AGRA) are bringing together a range of stakeholders to review the proposed imposition of VAT on agricultural inputs.

"Smallholder farmers form the bulk of food producers in rural areas of Uganda. Paradoxically, they also become net food buyers once the glut period is over as they are only able to produce enough for their families and for immediate living expenses," explained Dr Steven Were Omamo, AGRA director of policy and advocacy.

"They lack adequate access to quality-certified and affordable seeds, fertilizer and pesticides. Additionally, because of the small size of their landholdings, mechanization is often difficult and all digging operations are done by hand-held hoes, further limiting their farm outputs," he noted.

It is in this context that stakeholders will review the impact of a proposed 18% VAT on agricultural inputs after the termination of zero-rated supplies on agricultural inputs. In addition, this will herald the termination of exemptions on interest income on agricultural loans as well as the introduction of VAT on packaging materials.

"There is a disconnect between government's intention to promote commercial farming and the introduction of taxes on agricultural inputs," said EPRC senior research fellow Dr Swaibu Mbowa. "The impact will be immense as more than 70% of Ugandans are employed in the agricultural sector."

The multi-stakeholder meeting at the Kampala Serena Hotel will bring together a cross-section of individuals including Members of Parliament, officials from various Ministries and government agencies, farmers, development agencies, non-governmental organisations and private sector representatives.

The meeting aims to raise awareness among key stakeholders of the potential impacts of the proposed value added tax on agricultural inputs; Build understanding of how the proposed tax addresses key fiscal objectives of the Uganda Government; Build consensus around potential alternative options open to the Government as it strives to meet these objectives and Adopt a consensus statement with proposals for consideration by the government.

You can follow the conversation on Twitter #AgricVAT with @AGRAAlliance and @eprc_official

For more information contact:

Swaibu Mbowa (PhD), Senior Research Fellow, Sectoral Department, Economic Policy Research Centre. Tel: +256 414 541023/24 Cellphone: 0773-196544. Email: smbowa@eprcug.org

Steven Were Omamo (PhD) Director of Policy and Advocacy, AGRA, Tel: +254 20 3675000/ Cell phone: +254 703 033 000 and email: swomamo@agra.org

About AGRA

AGRA is a dynamic partnership working across the African continent to help millions of small-scale farmers and their families lift themselves out of poverty and hunger. AGRA programs develop practical solutions to significantly boost farm productivity and incomes for the poor while safeguarding the environment. AGRA advocates for policies that support its work across all key aspects of the African agricultural value chain from seeds, soil health and water to markets and agricultural education. AGRA works across sub-Saharan Africa and maintains offices in Nairobi, Kenya and Accra, Ghana. Learn more at www.agra.org

About EPRC

The Economic Policy Research Centre (EPRC) is Uganda's leading think tank in economics and development policy oriented research and policy analysis. The Economic Policy Research Centre was established in 1993 as an autonomous not-for-profit organization limited by guarantee to fill fundamental voids in economics research, policy analysis, and capacity building for effective in-country contributions to Uganda's policy processes.

Today EPRC is a reputable, credible and independent policy think tank in Uganda renowned for providing research based evidence and policy analysis to support the formulation, implementation, monitoring and evaluation of government policies.

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