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Monday, May 11, 2026
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Northern Uganda oil millers seek VAT relief to boo

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Northern Uganda oil millers seek VAT relief to boo
Oil millers operating in the northern region of Uganda are actively lobbying for relief from Value Added Tax (VAT) and other tax impositions, citing the detrimental impact these levies are having on their businesses. The core of their plea revolves around a recent budget proposal that significantly alters the tax landscape for the oil sector. Specifically, the proposal aims to increase the VAT on virgin oil to a substantial 18 percent. This represents a notable escalation from previous tax rates and is a primary concern for the millers. Beyond VAT, the millers are also grappling with an increase in excise duty. This duty, which is levied on specific goods, has seen a doubling, rising from 200 Ugandan Shillings (sh200) to 400 Ugandan Shillings (sh400) per litre of oil. This dual increase in taxation is creating a challenging operating environment, squeezing profit margins and potentially impacting the competitiveness of Ugandan oil products both domestically and internationally. The oil millers argue that these tax hikes are not only unsustainable but also threaten the viability of their industry, particularly in a region like northern Uganda that is still recovering and seeking economic development. They contend that the increased cost of production, driven by higher taxes, will inevitably be passed on to consumers, leading to higher prices for essential cooking oil. This, in turn, could disproportionately affect lower-income households. Furthermore, they express concerns that the increased tax burden could stifle investment in the sector, hindering job creation and economic growth in northern Uganda. The millers are urging the government to reconsider the proposed tax increases and to explore alternative revenue-generating measures that do not place such a heavy burden on their industry. They are advocating for a reduction in VAT and excise duty, or at least a phased implementation that allows businesses time to adapt. They believe that a supportive tax environment is crucial for the growth and sustainability of the oil milling sector, which plays a vital role in Uganda's agricultural economy and food security. The success of their lobbying efforts will be critical in shaping the future of the oil industry in northern Uganda and its contribution to the national economy.
Source: NewVision.co.ug
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