Uganda imposes levy on lucrative fish maw exports

Uganda, one of the leading global sources of fish maw – or swim bladder – has announced a new 7 percent export levy on the product as the country closes in on finalizing an export trade deal with China.

Uganda State Minister for Planning Amos Lugoloobi said the government has introduced the levy based on the value of swim bladder exports, as part of tax policy interventions to raise revenue for financing the UGX 44.7 trillion (USD 12.6 billion, EUR 10.4 billion) state budget for the 2021-2022 financial year.

The levy is 1 percent less than the figure initially approved by the Ugandan Parliament in early May 2021, following the passing of the Fish (Amendment) Bill, 2021.

Moreover, the 8 percent parliament had approved was an amendment to a previous proposal by the Ugandan Committee on Finance, Planning, and Economic Development, which suggested UGX 70,000 (USD 19.70, EUR 16.30) per kilogram of exported fish maw.

“This proposal will ensure value addition and more revenue for this industry although there is need to streamline and regulate the fish industry,” Jane Pacuto, the committee's vice chairperson, said.

The tax measure coincides with a notable increase in Uganda’s fish and fish products export earnings over the past few years. Export earnings have increased by more than 53 percent from UGX 429 billion (USD 121 million, EUR 100 million) in the 2015/16 financial year to UGX 805 billion (USD 227 million, EUR 187 million) last year.

In fact, Uganda, buoyed by an increasing demand for fish maw in the global market – especially in East Asia – started negotiating a possible fish maw export trade agreement with China in 2019 to harness the East African country’s potential to supply the product to the Chinese and Hong Kong markets, where the swim bladders are highly valued.

Uganda’s Minister of Agriculture, Animal Industry, and Fisheries Vincent Bamulangaki Ssempijja told parliament on 25 March his ministry “is in final stages of sealing a trade pact that will see Ugandans export fish products to China.”

He said the Uganda Revenue Authority and the solicitor general’s office have approved the proposed trade deal whose value is yet to be disclosed.

“What is left is for the Ministry of Finance, Planning and Economic Development to provide its input in the draft protocol,” he said.

Ssempijja said the draft protocol will empower the fisheries department to enforce measures that will ensure only good quality wild fishing and aquatic products are exported from Uganda to China, and will also restrict fish maw export trade to licensed fish-processing plants that meet international food safety and quality standards.

The fisheries department has already developed guidelines and standard operating procedures for fish processing companies interested in applying for permits to engage in wild fish exports to China.

“The companies are now developing their capacities and getting ready to take up the opportunity when the protocol is eventually signed,” Ssempijja said.

Imposing the 7 percent levy comes as pressure mounts on Uganda to carry out an analytical study to establish the value of fish maw internationally for ease of taxation of the products’ exports by the government.

“The committee recommends that government fast tracks the Fisheries Bill which is already before Parliament,” Pacuto said.

As Uganda fine-tunes its fish maw export protocol with China for final signing, concern has emerged on what some see as unfair treatment of fish suppliers that have for decades been benefiting from the highly priced fish maw.

The fish maw trade system, though not government regulated, allowed fish suppliers to get the swim bladders back from fish factories for private sale whenever they delivered their supply for cleaning and processing.

However, in early 2018, the government imposed new regulations that only permitted fish processing factories to engage in fish maw trade and export. Also banned was fish gutting at landing, or unregulated sites.

The regulation “severely cut the profits of fish suppliers, who are unable to sell the high value swim bladders to private traders while the factory owners benefitted greatly,” according to a previous report by U.K.-based non-governmental organization TRAFFIC International, which works globally on trade in wild animals and plants.

The NGO estimates the price of a 50 kilograms of fish in Uganda at USD 9.43 (EUR 7.80) per kilogram, compared to USD 188.7 (EUR 155.80) per kilogram for the swim bladder.

TRAFFIC is concerned incidents of fish maw smuggling from Kenya and Tanzania into Uganda for sale and export could complicated efforts to eradicate illegal Nile perch fishing in Lake Victoria.

Current efforts by all the Eastern Africa countries include the implementation of the third phase of Lake Victoria Fisheries Management Plan of 2016-2020 focusing on “recovery of biomass of Nile perch with sustainable utilization of the fisheries of Lake Victoria basin with equitable opportunities and benefits.”

For Uganda and other Nile perch fish producing countries in Africa, the challenge remains the underreporting of the fish maw exports “making it harder to identify, monitor and regulate possible unsustainable and illegal fishing linked to the trade,” according to TRAFFIC.  

Photo courtesy of the Ugandan Parliament