Anite labels coffee processing deal with UVCC invalid
Ms Evelyn Anite. PHOTO/FILE
What you need to know:
The agreement between the GoU and UVCC is supposed to take effect immediately, but Ms Anite confirmed that the brakes will be slammed on.
The Junior Finance minister (Privatisation and Investment), Ms Evelyn Anite, has said the controversial coffee agreement the government of Uganda (GoU) entered with Uganda Vici Coffee Company (UVCC), is invalid and will be reviewed.
“Given that the agreement was not signed in the right place, the signatories were not right [and] the company did not sign in its rightful way, we decided we revisit it and…come up with a government position,” Ms Anite told Saturday Monitor in a telephone interview yesterday.
Invalid agreement
She said the public, lawmakers and players in the coffee value chain are raising pertinent issues about the agreement.
The GoU, she hastened to add, is listening to the public outcry because it is “people chosen and doesn’t treat matters touching society” lightly.
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“We listen and we adjust. I am a student of my President. He listens. The points that the public has raised, we just have to sit down and listen and review,” she noted.
She further added that “the whole thing” is still under scrutiny and that a multi stakeholder meeting has been scheduled for Tuesday to iron out the issues that everyone is raising.
In the agreement, set to run until 2032, UVCC is not eligible to pay any form of tax available under the laws of Uganda.
Ms Anite described this as “unacceptable.”
She added: “If the agreement says totally no tax, we have to revisit and say, ‘look, pay PAYE, NSSF.’ Those taxes are there by law, we have to look at it,” Ms Anite said.
She said the intention of the review is to have all sides in no breach of the contract.
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The agreement between the GoU and UVCC is supposed to take effect immediately, but Ms Anite confirmed that the brakes will be slammed on.
“No way, there is no way. It is not valid. How can it be valid when it has not been signed in the right manner? The company hasn’t signed,” Ms Anite said, referring to neither one of the four individual owners Saturday Monitor has exclusively revealed signing on the dotted line.
‘Complex’ problem
She also noted the issues of premium coffee of Screen 18 could turn out to be complex.
“Those issues of Screen 18, do we really have it as a country? We need the Ministry of Agriculture to confirm that we have them and that each month, we are able to supply such amounts,” she said.
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The junior Finance minister also said the issue of tax holidays is a deal-breaker. The agreement expressly states that UVCC will not pay import duties, VAT, excise duty, stamp duty, corporate income tax and employment related taxes, as well as any other tax or imposition levied or charged under the laws or any other laws that may be enacted.
Ms Anite says this is unlawful. This runs counter to what her senior in the ministry—Mr Matia Kasaija—thought before he signed on the dotted line of the agreement on the GoU’s behalf in February.
The agreement gave UVCC free land in the industrial and business park at Namanve.
The company also received exclusive rights to buy all Uganda’s coffee before the government can look at other players.
Another clause in the agreement gives UVCC carte blanche to roast Uganda’s coffee beans, and manufacture coffee capsules, as well as grinding and making instant spray coffee.
All this production combined, UVCC hopes to produce 60,000 tonnes of processed coffee as per the agreement.
The GoU also committed taxpayers that where no exemption from tax is allowed under the law of Uganda or exemption provided is inadequate to provide the company with comprehensive relief, from taxes or other impositions, the government undertakes to bear the cost of all taxes.
GoU to meet?
Ms Anite’s revelations confirm the move by the GoU to put in place an inter-ministerial committee to decipher the contract.
The committee, which will seat on Tuesday, will reportedly comprise the Office of the Prime Minister (OPM), Ministry of Energy and Mineral Development, Ministry of Finance and Economic Development, Ministry of Agriculture, Animal Industry and Fisheries, the Attorney General (AG), and the Ministry of Works and Transport.
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When contacted, Mr Keith Muhakanizi—the Permanent Secretary in the OPM—was noncommittal.
“I don’t have that information,” Mr Muhakanizi said, adding: “What I know is that the government will be issuing a statement about that contract on Tuesday.”
AG Kiryowa Kiwanuka, who recently defended the deal, saying it didn’t break any Ugandan law, referred Saturday Monitor to the Ministry of Information, Communications Technology, and National Guidance.
“I don’t know if the information you have is true, but it will be Mr Chris [ICT minister] Baryomunsi to explain all of this,” Mr Kiwanuka said.
Mr Baryomunsi hadn’t responded to our calls and messages by press time.
