In Summary
  • Exempted. Among exempted educational material, according to URA are reference books, handbooks, publications, journals, literature set books, dictionaries, crayons, colour pencils, drawing art books, atlas, geometry set, mathematical sets, technical drawing sets, erasers, graph books and boards. Others are duplicating stencils, chalkboard instruments, pencil sharpeners, dusters, chalk, science related material and soft cover books.

Kampala. Paper manufacturers have denounced government’s move to introduce value added tax on some educational materials including counter books, ruled papers and note books.
This, they said, will have far reaching implications in regard to pricing, which, they will have no alternative but to pass on the cost to consumers.

In a notice published by Uganda Revenue Authority (URA) late last month, the tax collector notified paper manufacturers that some materials such as counter books, note books and ruled papers, among others had been wrongly declared as educational material, indicating they are not excluded from the 18 per cent value added tax.

“For avoidance of doubt educational materials do not include counter books, ruled papers … and other materials,” the notice, which was signed by URA commissioner general, Doris Akol, reads in part.
Speaking in a press briefing yesterday, Mr William Okello, the chairperson of the association of paper manufacturers, said they would pass the cost to end users instead of making losses.
The introduction of VAT on such materials, he said, will increase the price by about 18 per cent, if the exemption is lifted.

For instance, according to Mr Okello, a counter book, which on average costs Shs26,400, will increase by 18 per cent to more than Shs31,700.
This, he said, works to the detriment of the education sector and will reverse the gains, which President Museveni had sought to achieve while exempting some educational materials from paying taxes.

“The content of the [URA] notice raises concern for manufacturers because educational materials were excluded from VAT. The notice [if implemented] will increase the cost of such [some education] materials [which will be a problem] to parents and guardians,” he said.

According to manufactures, URA is seeking to levy VAT on hard cover books or counter books on claims that they are being used by business people and not students.
When contacted, Mr Ian Rumanyika, the URA manager public and corporate affairs, said the notice was only a clarification of an already existing law, emphasising that it is not new.

He noted that some manufacturers have been declaring counter books as educational materials, which according to the notice, the commissioner general sought to clarify.
On Monday, Mr Daniel Birungi, the Uganda Manufacturers Association executive director, told Daily Monitor that they were surprised by URA’s move, adding that they had had a discussion about the same matter with the tax collector.

“We had a discussion with the URA team and government before, now we are surprised to see the things we had agreed upon [being listed as non-educational material],” he said.
In a statement, paper manufacturers noted that the market would risk being flooded with Kenyan products, which are not taxed, a development that would have far reaching implications for the local industry.

VAT exempted
Exempted. Among exempted educational material, according to URA are reference books, handbooks, publications, journals, literature set books, dictionaries, crayons, colour pencils, drawing art books, atlas, geometry set, mathematical sets, technical drawing sets, erasers, graph books and boards. Others are duplicating stencils, chalkboard instruments, pencil sharpeners, dusters, chalk, science related material and soft cover books.

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