Government is to review the withholding tax imposed on payments for agricultural produce.
Government in this financial year budget imposed 1% tax on agricultural supplies which farmers are resisting noting that it is affecting their income.
The government ‘s intention to revisit the tax was revealed by the minister of Agriculture Vincent Sempijja while officiating at the celebration of the International Coffee Day held at Mukono Zonal Agriculture Research and Development Institute in Mukono district under the theme: “Recorganizing the role of women in coffee”.
Sempijja said that he has written to the minister for finance to consider the proposal to reduce on this tax or scrap it.
“What we wanted was that each person contributes a small percentage to the government treasury through tax so we agreed on the 1% on value addition. What we didn’t anticipate is that the tax will be transfered to farmers. We are going to revise it so that the tax becomes indirect and doesn’t affect only farmers” he said
The minister further added that by end of this year, the special coffee bill would have been passed to help in promotion and marketing of farmers
“It will address marketing strategies, branding Addressing the gender issues and funds for promotion of coffee processing. The aim is to make our coffee globally known and recognized” Minister Ssempijja said.