Beer Brewers Demand For Protection Against Illicit Alcohol

Posted by: Kyeyune Andrew Jonathan in Uganda news September 8, 2022

David Valencia, the Managing Director of Nile Breweries Limited, has asked authorities to make laws against illicit alcohol and those supporting and protecting the beer industry.

He said the industry needs protection from unfair competition and disarming tax laws. Valencia revealed that the beer industry is a big and global sector contributing to Uganda’s economic development. Therefore, there’s a need to create a leveled field for the sector to thrive.

He made these remarks while making a presentation on ‘how can tax regime stimulate post-covid-19 investments’ at the ongoing Uganda Economic Forum.

“The main challenges that are facing the beer sector right now are digital tax stamps and illicit alcohol. Despite government banning sachets and implementation of tax stamps, fiscal leakage from illicit alcohol has accelerated. The value of this illicit trade in Uganda is nearly $1 billion not taxed and 1.6 times larger than in 2017,” he said.

He further revealed that in 2020, the total fiscal loss from illicit trade amounted to 458 million in 2020. This is a 29% compounded growth rate since 2017.

Valencia urged the government to increase the competitiveness of formal players. He said this can be done by eliminating digital tax stamps and enforcing the stamp on illicit alcohol, increasing control in the distribution of ethanol among others.

The UG Economic Forum is an annual convening organized by NBS TV. Other partners are Nile Breweries, Uganda Revenue Authority, Uganda Development Bank, Uganda Development Commission, and Ministry of Fiancé among others.

The main aim of the forum is to converge key stakeholders. Especially from the private sector, innovators, government, civil society, academia and the media.

These meet mainly to exchange ideas on Covid-19’s impact and what lies in the further including opportunities and challenges for the economy.

Harriet Ntabazi, the Minister of State for Trade promised that government is working to create a conducive atmosphere for businesses to thrive.

She however emphasized the need for quality products and consistent supply by manufacturers. She said this is one of the key factors to staying competitive.

Gerald Namoma, a senior economist at the Ministry of Finance said there’s a need to create policies that support investment.

“A lot of the policies that we put in place are not aimed at increasing taxes but addressing some of the challenges that manufacturers like Nile Breweries highlighted. Amidst a number of challenges, we are on course to improve on our tax and revenue policies,” Nanoma said.

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