Parliament questions coffee trade deal between Gov’t and Italian investor

Arabic coffee

Members of Parliament have raised concern about an agreement signed between the government and the Uganda Vinci Coffee Company Limited.

According to the document dated February 10, 2022, Ramathan Ggoobi the Secretary to Treasury signed on behalf of the government while Enrica Pinetti, an Italian investor and the Board Chairperson of Uganda Vinci Coffee Company Limited on behalf of the company. Pinetti, is the woman behind the stalled Lubowa Hospital project.

The company was given free land in the Industrial and Business Park at Namanve after it indicated its capability of establishing a coffee processing facility in Kampala.

The company will be given exclusive rights to buy all Uganda’s coffee even before the government can look at other players. Its concession will end in 2032, but it is subject to renewal.

Abed Bwanika, the Shadow Minister for Agriculture tabled the document titled Deed of Amendment and Restatement before the Tuesday plenary sitting.

Bwanika said that the document seeks to alienate Ugandans that are involved in coffee production and trade out of business by giving monopoly of purchase and export coffee from Uganda to the company.

He also reported the proposed exemption of taxes by the company for ten years.

“This document has provisions which are going to exempt the company from paying all taxes in the country including Income tax, Pay As You Earn, Excise duty, and NSSF. This document has provisions that seek to subsidize this company giving them a special tariff of 5 cents per unit in terms of electricity,” Bwanika said.

Bwanika also highlighted provisions that are going to provide the company money to build its infrastructure yet it is going to pay zero tax to the country.

Bwanika challenged the legality of the agreement and asked the Speaker of Parliament, Anita Among to refer the document to a committee of Parliament for investigations.

Richard Lumu, the Mityana South MP said that the agreement was usurping powers of parliament it was never involved.

Dan Atwijukire Kimosho, the Kazo County MP said that it was wrong for the Ministry of Finance to sign an agreement with the investor who was guaranteed funds to set up a specialized hospital in Lubowa, which is yet to be constructed.

Gyavira Ssemwanga, the Buyamba County MP queried the issue of tax exemptions by the Ministry of Finance.

 He wondered how the government intends to extend services to Ugandans amidst several companies that are exempted from taxes.

Among tasked the committee of Trade to study the initial agreement, the addendums as well as the deed, and carry out an investigation and report back to parliament. 

She also directed the Ministry of Finance to report to the Committee on Finance in regard to tax exemptions by the company.

Mathias Mpuuga, the Leader of Opposition said that the Ministry of Finance should be asked to surrender all documents in their possession regarding the coffee project. 

He also tasked the Attorney General to explain how the agreement came into place.

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