Yoweri Museveni’s administration sparked a trade war between Uganda and Kenya by imposing an extra Ksh3 tax for every kilogram of Irish potatoes being exported to Uganda.
The Uganda Revenue Authority stated that the withholding tax on the farm produce had been increased by 6 per cent, resulting in tens of trucks carrying potatoes from Kenya to Uganda being stranded at the border due to the inability to pay the extra levy.
Farmers from Nakuru, Eldoret, and Kisumu have been warned against attempting to export the potatoes without paying the tax. In defence of the move, URA stated that Uganda had undervalued the product for too long and needed the tax revision.
The proposal to implement the new tax was first rolled out on April 12, with minimal engagement from Kenyan traders. Traders exporting the product now describe the new tax as exorbitant and hastily implemented.
Uganda’s decision to abruptly impose the levy on Kenya has also raised fears that it could lead to retaliation, potentially harming trade between the two East African countries.
Kenya has previously imposed bans on Ugandan products, including powdered milk and eggs.
