By Izama Angelo
Oct 28, 2003 - Monitor
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KAMPALA � Government earns nothing from the export of apparels under the much-touted African Growth and Opportunity Act, The Monitor has learnt. Apparels Tri-Star, the Sri Lankan company that runs the textile factory at Bugolobi, does not pay any direct taxes to government. None of the money from the apparels exports comes to government coffers either, a senior government finance official said yesterday. �Nothing! Government does not earn any money from the company because of a policy not to tax exports,� the Commissioner for Tax Policy, Mr Lawrence Kiiza, told The Monitor yesterday. �This also follows a tax rebate for Tri-Star in an agreement it signed with government in which it was agreed that government would meet the tax bill for procurements the company made to start up its business here,� the official added. Kizza, however, said tax exemptions to Tri-Star are only limited to buying the machinery and equipment it needed to �start its operations�. The acting executive director of the Uganda Investment Authority, Mr Lawrence Byensi, confirmed that there is no tax levied on exports out of the country. �This includes plant and machinery meant for export. These are not taxed,� he told The Monitor by phone. In the agreement Tri-Star signed with government, it agreed to give the Sri Lankan-based company the �full range of investment incentives� under a government policy to encourage investment in industries that can export to the United States under Agoa. President Yoweri Museveni has been the chief proponent of access to markets through Agoa as one of the ways in which poverty can be fought in the country. None of the money actually received from the Agoa exports goes to the national coffers, save for the taxes on salaries paid to the employees. The Senior Presidential Assistant on Agoa, Ms Susan Muhwezi, has said before that Apparels Tri-Star receives $200,000 (Shs 40 million) a week from its textile exports. However, a presidential advisor on Agoa, Mr Onegi Obel, said the company is just an example to show that export-oriented production can work and that government is looking for �30 Tri-Stars� to help buoy the textiles sector. �Tri-Star is simply a start-up business and businesses have an investment cycle. It may not be making any money now for government but the long-term benefits for the economy are there,� Obel said. �It is unfair to ask the question whether or not there is a monetary benefit for Uganda right now,� he added. Efforts to speak to the management of the firm had proved futile by the time we went to press. Obel added that last week�s strike at the factory in Bugolobi was a case of bad management and not poor policies. �We are currently sorting out this problem of poor management,� he said. Mr Hashim Wasswa, a technical officer based in the Agoa country response office, said the textile industry around the world is battling with labour issues. �The International Labour Organisation is fighting poor labour policies associated with textile industries. What happened in Uganda is not unique because these industries have a tendency of stretching their labour force and imposing long hours and difficult work conditions to meet the pressure of orders,� he said. |
� 2003 The Monitor Publications
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