Taxes on low cost beer slashed to attract manufacturers

By Ritah Kemigisa

Factories producing the opaque (low cost) beer will in the new Financial Year 2022/2023 enjoy a tax relief intended to attract more local manufacturers into the alcohol production industry.

Manufacturers of opaque beer will effective 01 July pay 12% or Shs150 per litre of the beer produced as compared to the current 20% or Shs 230 per litre.

This is after the House on Wednesday passed the Excise Duty (Amendment) Bill, 2022 whose object is to amend the Excise Duty Act, 2014, to provide for the definition of “fruit juice”, “un-denatured spirits” and “vegetable juice” and other related matters.

Opaque beers are locally sourced and manufactured beers using a low cost industrial process.

An example of opaque beer includes Chibuku, a local brew that was produced by Nile Breweries Limited (NBL) until 2018, tonto, ajono, mulamba, malwa, kwete among others.

The Chairperson of the Committee on Finance, Keefa Kiwanuka, says the proposal will encourage the reopening of companies that had closed as a consequence of the higher tax.

However other MPs including Kalungu West County’s, Joseph Ssewungu, have opposed the reduction of taxes on opaque beer opining that it was biased towards benefiting multinational companies like Nile Breweries Limited.

Written by Noelyn Nassuuna