Uganda’s First Salt Factory ‘Kampala Salt’ Pleads to Gov’t for Tax Holiday

Kampala Salt Ltd, a subsidiary of The Kampala industries And Infrastructure Development Limited (TKIID LTD) has asked the Government of Uganda to consider granting them a 10 year tax holiday to spur investments in the salt industry.

The Namagunga, Buikwe District Based USD 10M automated plant-the First of Its Kind in Uganda, which started production in July 2020, has a manufacturing capacity of more than 16000 tones.

Speaking to Journalists on Thursday at the factory, the Company’s General Manager Alfonso Camilo said the tax holiday will not only help the salt industry grow in the country but also boost Uganda’s salt export to other countries.

‘’Sea salt, our raw material is got from India because since Uganda is a land and we have been paying 25% import duty which we spoke to government and they reduced to 10%.But we want to beg government to scale it down to zero since even the neighboring Kenya can’t provide enough raw material because what they have is also not enough to them’’, revealed Alfonso.

From Left;Kampala Salt GM Alfonso, Production Manager Patel and Finance Manager Varsani

He added that besides the need to put the import duty at zero, they want the government to grant them a tax holiday that would enable them develop the salt industry since it is in its infant stage.

‘’Currently our market is in Uganda since we don’t have sufficient raw materials because we import them from India and we still have import duty impediments. Policies like ‘Bubu’ are helping us but we need more support from Uganda about the competition from Kenya and Tanzania’’, he added.

Patel Ashokkumar, the company’s production manager said Kampala salt is iodized and therefore suitable for human consumption as certified by the Uganda National Bureau of Standards.

Economists argue that Uganda’s salt import bill has increased over the years creeping resources that would have been saved had the local Salt production like Kampala Salt been empowered through incentives including Tax Holidays and import substitution.

According to a Finance Ministry report demonstrating about 1,500 imports for the year 2019, Uganda spent over Shs95.7b ($25m) on importing salt. Almost 90 per cent of the salt consumed in Uganda is imported, mostly from the neighboring Kenya.

The government has in the recent years been granting additional tax incentives or exemptions to attract and promote investments with focus on encouraging firms to re-invest their capital and expansion, create jobs and boost trade to some companies.

Specialists argue that the Government should offer essential companies like Kampala Salt tax holidays when investors want them because local Firms have potential to create many jobs and allow technology transfer.

“With the establishment of Kampala Salt Ltd I think Uganda is making a lot of progress with regard to access to Salt Production. This in itself calls for a number of things like protecting local producers from imports and supportive policies should be put in place because if domestic manufacturers are squeezed they may fail to sustain production,” revealed one of the traders.

In time, the plant is expected to lower the cost of salt and make it more widely available in Uganda if incentives like tax holidays are granted that will ease production and supply.

During a guided tour to the factory mid last year, Hon. Evelyn Anite, the state minister in charge Investment assured the country that the factory will not only boost local production and reduce the import bill but also export to Rwanda, South Sudan, DR Congo and Burundi.

It should be remembered that while addressing newly elected NRM MPs who are in a retreat at the National Leadership Institute in Kyankwanzi District, President Yoweri Museveni tasked them to support the government in boosting industries, especially for those dealing in final products, if the economy is to grow.

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