Tax rise on hides exports sought

According to David Muwanga, investors have urged the government to increase taxes on exports of raw hides to encourage investment in the leather tanning and processing sector. Export of raw hides and skins has compromised their quality, earning the government only sh15.7b annually, a report released by the Presidential Investors Round Table (PIRT) has said. PIRT is a body, which was created by President Yoweri Museveni, to identify obstacles and propose solutions to investment promotion. 'Uganda exports 95% of the hides and skins in raw form. This has reduced earnings of the primary producers and compromised the quality of the products, making the country earn only $9 million (about sh15.7b)', the report said. The report attributed the reduced earnings to lack of a level playing field due to the poorly-managed levy with gross under-declaration and under-valuation. 'Some exporters of raw hides and skins came to Uganda to invest in tanneries. However, after realising that the environment was not conducive, they dropped the idea and turned into traders and exporters of raw products', the report said. The committee urged the government to annually increase the export levy to discourage exports of raw hides and skins.' In the report, members said the government should levy 40% in the new financial year and raise it to 60% in 2007/08 and finally ban exports in the 2008/09 financial year. It says Nigeria, Ethiopia, Sudan, Zimbabwe, Zambia, Morocco, Tunisia and Eritrea have banned export of raw hides and skins. Source: New Vision website, Uganda