Yoweri Museveni’s administration sparked a trade war between Uganda and Kenya by imposing an extra Ksh3 tax for every kilogram of Irish potatoes being exported to Uganda.
Speaking of the new levy, the Uganda Revenue Authority remarked that the withholding tax on the farm produce had been increased by 6 per cent.
This led to tens of trucks carrying potatoes from Kenya to Uganda being stranded at the border due to the inability to pay the extra levy.
Additionally, it was reported that farmers from Nakuru, Eldoret and Kisumu have been warned of trying to export the potatoes without paying the tax.
In their defence, URA remarked that for far too long, Uganda had undervalued the product and hence needed the tax revision.
The proposal to implement the new tax was first rolled out on April 12, with minimal engagement from Kenyan traders.
Traders exporting the product now term the new tax as exorbitant and hurriedly done.
Uganda’s decision to abruptly impose the levy on Kenya has also raised fears that it would lead to retaliation crumbling trade between the two East African countries.
Kenya has in the past imposed a ban on Ugandan products including powdered milk and eggs.
On Saturday, April 20, Ugandan President Yoweri Museveni explained how his country had reduced its dependence on Kenyan products, especially milk.
“By 1964, all the Towns in Uganda were selling packed milk from the KCC (Kenya Creameries Co-operative),” he stated adding that he introduced milk coolers in his country to end Kenya’s monopoly.
“In Uganda now, there are 635 Coolers, and 160 factories of milk processing (17 on a large scale, 35 medium and 105 cottage) and milk production has gone from 200 million litres a year in 1986, to now 5.3 billion litres,” he stated.
