Tax On Sugar Down But Remains High On Second-Hand Clothes


At least many homes in Rwanda will afford sugar but will have to spend more money to buy second-hand clothes and shoes.

Going by the National Budget for 2017/2018 fiscal year, tax on imported sugar from east Africa has dropped to 25% but previously tax on sugar imports was 100%.This means in retail shops the price of sugar per kilogram may drop from Rwf1000 to Rwf250.

In the budget, Rwanda has significantly cut down its dependence on donor money. Most of the funds for financing 2017/2018 fiscal year will be raised domestically.

“We are on the right track as far as self-reliance is concerned,” Claver Gatete Minister of Finance and Economic Planning told parliament while presenting the national budget bill on Thursday.

Last year, over 37.6% of the National budget was from donors but this financial year only 17% of the national budget will be funded by donor money.

Gatete said the total budget for 2017/2018 fiscal year is worth Rwf2 trillion (approximately $2.5 billion). Rwanda will have to locally raise Rwf1.7 trillion (83% of the total budget).

In the new budget, Minister Gatete told parliament that domestically financed projects will consume a total of Rwf460.2 billion representing 22% of the total budget.

Heavy road construction machinery and passenger buses have been exonerated from import tax

Meanwhile, externally financed projects will take Rwf312.5 billion representing 15% of the total budget.

Expenditure on development projects is worth Rwf772.7 billion which accounts for 37% of the budget.

Minister Gatete said that the 2017/18 budget is “committed to fiscal consolidation and prudent borrowing policy to keep the level of debt sustainable.”

The Minister told lawmakers that the recurrent expenditure is set to increase by Rwf131 billion from Rwf994 billion in 2016/17 revised budget to Rwf1.1 trillion.

Some of the new projects including salaries, wages and organization of August Presidential elections were highlighted to have pushed the new budget higher, Minister Gatete told parliament.

Meanwhile, total grants have increased to Rwf356.7 billion compared to Rwf326.6 billion in 2016/17 revised budget.

Under the 2017/2018 budget, the country considers cutting down trade imbalance, financing infrastructure projects, among others.

For instance, finance Minister Gatete told parliament, that Rwf414.9 billion (20%) will go to energy rollout program, road maintenance and extension works at Kamembe and Kanombe airports and construction of  Bugesera airport.

Some roads scheduled for construction include; Kivu belt (Western province), Ngoma-Nyanza road and Nyagatare-Rukomo.

Members of Rwanda parliament approve national Budget for the 2017/2018 fiscal year

Machinery, food commodities exonerated

In the new budget, taxes on equipment and machinery of public interests were slashed down.

For example, road tractors were exonerated while trucks carrying between 5-tons will be paying only 10% of custom taxes, down from 25%.

Heavy trucks carrying beyond 20 tons were also exonerated, compared to the previously 25% taxation.

Buses with 25-50 seater capacity will also pay 10%, down from 25%,. Buses beyond this capacity were exonerated, which intends to improve city transport, according to Gatete.

Machinery used in apparel industries saw decline in custom fees, “to promote locally made products,” said Gatete.

Second-hand apparels will still pay tax of $2.5 per kilogram of clothes, and $5 per kilogram of shoes.

Telecommunication equipment were totally exonerated compared to 25% custom fees previously imposed.

Food commodities imported from the East African Community were also slashed down with tax on sugar import cut to 25% from previous 100%.

Rice will reach Rwandan market from neighbouring countries after paying 45% customs instead of 100%.

MPs questioned some of the projects that have stalled for some time now and still demand more budgets.

MP Juvenal Nkusi highlighted some projects that continue to consume part of the national budget yet they have been in existence for years – an example of Kivu belt road construction in Karongi district, Western Province and Kanombe airport extension works.

Nkusi also said, it would not be a good plan to build two adjacent airports in the same budget.

“Instead of extending Kanombe airport which is close to the new Bugesera airport, why not upgrade Kamembe for example to international standards as work at Bugesera works continue?”

Gatete said, Kanombe is strategic because it is already handling an increasing number of traffic and later on will serve as a back up to Bugesera airport which is set to be the main airport of the country.

As per East African Community (EAC) arrangement, Uganda also announced Ush29 trillion ($8 billion) budget for the 2017/18. Tanzania announced its budget for 2017/2018 will be TShs33trillion, while Kenya announced Ksh1.7 trillion for the 2017/18 fiscal year.

Other member states; South Sudan and Burundi are yet to announce their budgets for 2017/2018 fiscal year.

PHL sugar output exceeds forecast for CY 2016-2017


Philippine sugar production as of May 28 has already reached 2.333 million metric tons (MMT), surpassing both the government’s projection and the output in the previous crop year (CY), data from the Sugar Regulatory Administration (SRA) showed.

Preliminary data from the SRA, a government-owned and -controlled corporation attached to the Department of Agriculture (DA), showed that sugar production has reached 46.667 MMT of 50-kilogram bags (Lkg) or 2.333 MMT.

The figure is 4.24 percent higher than the 2.238 MMT produced in the previous crop year. It is also 3.68 percent higher than the SRA’s projection of 2.25 MMT.

Earlier SRA Administrator Anna Rosario V. Paner told the BusinessMirror that sugar production will go up due to the expansion of areas planted with sugarcane.

Also, Paner said more farmers were encouraged to plant sugarcane this year due to the favorable price of sugar at the start of CY 2016-2017.

Based on the preliminary estimate of SRA, sugarcane areas in the current crop year expanded by 1.87 percent to 419,207 hectares, from 411,502 hectares recorded in the previous crop year.

SRA data also showed that, as of May 28, the volume of sugarcane milled has reached 25.851 MMT, 11.74 percent higher than the 23.135 MMT recorded a year ago.

However, data from the SRA showed that the sugar-milling recovery rate declined by 6.19 percent to 1.82 Lkg per MT, from 1.94 Lkg/MT recorded in CY 2015-2016.

Refined sugar production also declined by 11.3 percent to 809,641 MT (16.192 Lkg), from 911,084 MT (18,221,688 Lkg).

The SRA said domestic demand for sugar during the nine-month period was pegged at 1.55 MMT, 2.8 percent higher than the year-ago level of 1.5 MMT.

The SRA estimated the domestic demand for sugar in CY 2016-2017, which would end on August 31, would hit 2.15 MMT.

Sugar produced locally is also exported to the US under the tariff rate quota (TRQ) scheme. The TRQ allows countries to export specified quantities of a product to the US at a relatively low tariff.

Earlier the SRA said the country has already shipped 74,464.99 MT of sugar to the US, filling more than half of the 136,201 MT allocated by Washington. Paner said she expects local sugar exporters to ship the remaining volume to the US by June.

State cuts sugar prices to stop political rhetoric


The Government has announced a reduction of sugar and milk prices as it attempts to push back the rising cost of basic food items. Thursday, the State announced a reduction of the retail price of sugar to Sh120 per kilo and Sh50 for half a litre of milk to stem the onslaught from Opposition leaders, who have turned food prices into a campaign issue.

Currently, a kilo of sugar is retailing at about Sh160 while a half litre packet of milk costs Sh60. The reductions are expected to hit the market on Monday, a few weeks after the price of maize flour was lowered to Sh90 per 2kg packet.

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The reductions follow a duty waiver on sugar and powdered milk imports.Prosecuting traders And keen to ensure the success of the maize subsidy programme, authorities have resorted to prosecuting traders selling above the recommended price and directed millers to file returns on grain allocated to them, including distributors, to counter hoarding.Government spokesman Eric Kiraithe yesterday explained the reprieve on sugar and milk had taken time as authorities wanted to ensure that the subsidy programme did not encounter the challenges that have rocked the supply of maize flour.”In April, the Government waived duty on imported sugar and powdered milk, which has now landed. We have been working on modalities with the dealers and market players to ensure that people do not behave the way they did with maize flour,” Mr Kiraithe said.

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He was referring to a Kenya Gazette notice dated May 11 that waived tax owing to the raging drought that pushed prices up.The waiver accounted for 30,000 tonnes of sugar and 9,000 tonnes of milk powder imported by milk processors with the permission of the Kenya Dairy Board.Yesterday, President Uhuru Kenyatta and National Super Alliance (NASA) presidential candidate Raila Odinga clashed over the food crisis in separate campaign events.”The Opposition is capitalising on the food shortage to hoodwink Kenyans into voting for them without offering them an alternative to such pertinent issues,” Uhuru said in Trans Nzoia County.And to appease residents of the country’s breadbasket region, who are uneasy that maize imports could send local prices plummeting at the expense of farmers, the President assured that the subsidy programme was a stopgap measure.

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“The maize imports are a temporary intervention to check the skyrocketing cost of essential commodities like maize and sugar, but it will stop the moment farmers harvest their crop,” Uhuru said.He also announced a reduction in farm inputs to cushion farmers.”Starting September, a 50kg bag of DAP fertiliser will be sold to farmers at Sh1,200, from Sh1,800, while a kilo of maize seed will be sold at Sh120 from Sh180,” he said.But speaking at the Coast, Raila kept up the pressure on the Government, which he accused of deliberately triggering the food crisis so well-connected traders could profit from the imports. Living costs

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“The cost of living is unbearable and most Kenyans cannot afford food. The subsidised maize meal is not available in most parts of Kenya,” Raila charged.”There are five key sins Jubilee has committed and which should be good reason to vote them out. One of these sins is the intolerable cost of living,” Raila said in Kilifi.But the Government spokesperson dismissed Raila’s claims that Jubilee had frustrated the importation of cheap maize from neighbouring Ethiopia and had instead allowed traders to ship it from Mexico to make super profits.Kiraithe said Raila’s suggestion that the maize from Ethiopia was cheaper was misguided. He explained that the Government had sent a delegation led by Agriculture Cabinet Secretary Willy Betty to Ethiopia to negotiate maize import costs.”President Uhuru Kenyatta sent a delegation to Ethiopia in February this year and the Government has so far allowed for the importation of 13,000 metric tonnes of maize into Kenya,” he said. Importing maize After negotiations with the millers who expressed interest in importing maize, he said, it became clear that grain from Ethiopia would be too costly.”It became clear that a 90kg bag of maize from Ethiopia would retail at between Sh4,400 and Sh5,000 given the obtaining dependent variables. The notion that this maize will be cheap is, therefore, grossly misguided,” Kiraithe