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Uganda Makes U-Turn On Deal To Abolish Taxes On Kenyan Juices2 minutes read

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Uganda has made a U-turn on a tax agreement it signed with neighbouring Kenya in December 2019, saying it needs the revenue to meet its annual budget.

Uganda had previously agreed to abolish 12% duty on Kenyan-manufactured fruit juices and also removed 12% verification fee on the country’s pharmaceutical exports.

Kenya says that the tax makes Kenyan-made goods more expensive in Uganda, adding that the unilateral tax by an EAC partner state is in breach of the Customs Union protocol.

The Uganda Revenue Authority (URA) seeks to raise a total of $5.43bln in domestic taxes to finance part of the $12.23bln budget for the 2020/2021 fiscal year.

As part of the agreement that was signed in Kampala by Kenyan trade officials led by the then Principal Secretary in the Ministry of Trade Chris Kiptoo and his Ugandan counterpart Grace Choda, Uganda had committed to abolish the contentious taxes by June 30 this year, and to provide an advance progress report on March 31, 2020.

In return, Kenya committed to lift the ban on exports of poultry products to Uganda that was imposed on February 14 last year, and also to increase market access for Ugandan sugar to 90,000 tonnes from 30,000 tonnes, subject to verification by Kenya in February 2020.

Kenya also lifted a long-standing ban on export of beef and beef products to Uganda.

The two countries also agreed that Kenya imposes 16 per cent VAT to control influx of Ugandan milk into the Kenyan market and protect local dairy farmers.

At the recent meeting of the EAC Sectoral Council of the ministers of Trade, Industry, Investment and Finance (SCTIFI), Uganda said that juice and pharmaceutical taxes is a “revenue issue” and that abolishing them would lead to loss of revenue to the Ugandan government.

Uganda said it intended to resolve the issue in June next year. Kenya requested Uganda to consider exempting its juices and pharmaceuticals from duty while awaiting resolution of the matter, but its request was turned down.

Uganda had introduced the discriminative excise duty on Kenyan juice and verification fees on pharmaceuticals under the Excise Duty Amendment Act 2017.

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Air Tanzania Resumes Scheduled Flights To Harare

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Air Tanzania resumed scheduled flights to Harare on Wednesday after a seven-month suspension due to the COVID-19 pandemic.

The airline joins a host of other regional and international airlines that have resumed flights into Zimbabwe after the country reopened its skies at in October.

Some of the airlines that have resumed flights into the southern African country include Emirates, Ethiopian Airlines, Kenyan Airways, South African Airlink and Fastjet.

“The flights resume today on Oct. 27 2020 and will be served initially twice weekly on Tuesday and Friday.

“Air Tanzania will operate the route via Lusaka, Zambia using a Dash8-Q400 aircraft,’’ the airline said in a statement Tuesday.

An official at the airline said as with the new normal, the flights would be operated under new COVID-19 health regulations.

“We are thrilled to be resuming the Lusaka-Harare flights. This South bound route connects both Lusaka and Harare business people, tourists and academics to the port city of Dar-es-Salaam and beyond,” the official said.

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Kenya May Issue Bond To Bridge Infrastructure Funding Gap

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Kenya is considering issuing a sovereign green Diaspora bond in order to bridge the current infrastructure funding gap, an official said on Tuesday.

Luke Ombara, Director, Regulatory Policy and Strategy at the Capital Markets Authority (CMA) said during the virtual release of the Capital Markets Soundness Report in Nairobi.

Ombara said that the bond would tap into the resources of Kenyans based overseas who traditionally send money which is mostly used for consumption.

“The Diaspora have indicated that they would like to be part of the economic recovery of Kenya through financing long term projects in exchange for profit,” Ombara said.

Ombara said that a study will also be undertaken to determine the amount of investor appetite in order to avoid under subscription of the debt instrument.

“We think that the bond will be appealing to the Diaspora because the yields will be similar to that of treasury bonds,” he noted.

Ombara added that the country had already put in place measures to make issuance of infrastructure and green bonds attractive through appropriate tax incentives.

According to Ombara, a committee has already been set up to identify public projects that qualify for green finance.
“We also have the local capacity to assess potential green projects in the country,” he revealed.

According to the capital market regulator, the bond was initially scheduled to be issued earlier in the year but was postponed due to the outbreak of the COVID-19 pandemic.

Ombara observed that discussions are ongoing to decide on whether the financial instrument will be a foreign denominated or local currency bond.

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Air Tanzania Resumes Flights to Entebbe, Uganda

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Air Tanzania on Monday resumed flights to Entebbe International Airport after six months of closure due to Covid-19, a move the airline MD says will help promote investment in the region.

The Managing Director Air Tanzania, Mr Ladislaus Matindi, in a statement, said: “We continue to extend the wings of Kilimanjaro over Africa and beyond so that the investment, trade and tourism opportunities presented by the resumption of these flights and the expansion of the network will certainly add value to our destination countries as we strive to offer affordable and improved connections.”

Mr Matindi made the remarks in a statement read by the airlines country station manager at Entebbe International Airport on Sunday during the airlines first flight in the country following the reopening of the airport for passenger travel.

“Air Tanzania will be providing two frequencies per week to Entebbe on Wednesday and Sunday connecting passengers from Dar es Salaam Kilimanjaro and Arusha. Air Tanzania will also make two frequencies per week to Lusaka zambia via Harare on Tuesday and Friday connecting passengers from other places at Dar es Salaam hub” he said.

Mr Matindi said Air Tanzania has taken all precautions regarding Covid-19 to take care of both the passengers and crew’s health during operations to all destinations.

“Soon Air Tanzania Company Limited will connect to Mumbai India, Bangkok Thailand and Quanzhou China via dare s Salaam” he said.

The station manager of Air Tanzania Ms Amanda Nyambona said the airline that normally operates four flights a week but had to schedule to two flights due to the Covid 19 pandemic was half board on the first flight on Bombardier Q400 which is a 76 seater.

“People are still scared of travelling, we know there is Covid but we are safe, our flights are disinfected upon arrival and departure, we observe a two-meter sitting distance between passengers who are required to wear masks,” she said.

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