FINANCE ACT, 2005.

ARRANGEMENT OF SECTIONS.

   Section

PART I
PRELIMINARY.

   1.   Short title.

PART II
AMENDMENTS TO THE FINANCE ACTS.

   2.   [Repealed]

   3.   Amendment of Parts I and II of the Third Schedule to Finance Act 2003 and Part I of the Second Schedule to Finance (No. 2) Act 2002.

   4.   Repeal of sections 7, 8, 9 and 10 of the Finance Act 2003.

PART III
TAXES REMITTED UNDER THE EXCISE TARIFF ACT AND THE CUSTOMS TARIFF ACT.

   5.   Remission of excise duty.

   6.   Partial remission on specified products.

   7.   Remission of import duty and excise duty on pharmaceutical products.

   8.   Conditional remission of import duty and excise duty on raw materials.

PART IV
MISCELLANEOUS.

   9.   Specific rates to apply to imported products only.

   10.   Amendment of First Schedule to the Finance Act 2003.

   11.   Amendment of Part IV of Fourth Schedule.

      First Schedule   [Repealed]

      Second Schedule

      Third Schedule   Amendments to the Fourth Schedule of the Finance Act, 2003.

FINANCE ACT, 2005.

Commencement: 1 July, 2004;
sections 9 and 10, 1 July 2003

   An Act to provide for the alteration of certain taxes and duties, to amend certain written laws relating to those taxes and duties, and for other related purposes.

PART I
PRELIMINARY.

1.   Short title.

   This Act may be cited as the Finance Act, 2005.

PART II
AMENDMENTS TO THE FINANCE ACTS.

2.   ...

3.   Amendment of Parts I and II of the Third Schedule to the Finance Act 2003 and Part I of the Second Schedule to Finance (No. 2) Act, 2002.

   (1) Parts 1 and 2 of the Third Schedule to the Finance Act 2003 and Part 1 of the Second Schedule to the Finance (No. 2) Act 2002 are amended in the manner specified in the Second Schedule to this Act.

   (2) The specific rates of excise duty of Shs. 28,800 per 1,000 sticks applicable to tobacco products with H.S. Codes 2402.10.90, 2402.20.90, 2402.90.90 and the specific rate of excise duty of Shs. 17,300 per 1,000 sticks applicable on tobacco products with H.S. Codes 2402.10.10, 2402.20.10 and 2402.90.10 specified in Part 1 of the Second Schedule apply only to imported products.

4.   Repeal of sections 7, 8, 9 and 10 of the Finance Act 2003.

   Sections 7, 8, 9 and 10 of the Finance Act 2003 are repealed.

PART III
TAXES REMITTED UNDER THE EXCISE TARIFF ACT AND THE CUSTOMS TARIFF ACT.

5.   Remission of excise duty.

   (1) The excise duty payable under section 3 of the Excise Tariff Act by a manufacturer in Uganda of locally manufactured goods is remitted.

   (2) The remission granted under subsection (1) does not apply to goods specified in Part 1 of the Third Schedule to this Act.

   (3) Notwithstanding the rate of excise duty charged in respect of beverages, spirits arid vinegar falling under Chapter 22 of Part 1 of the Second Schedule to the Finance (No. 2) Act 2002, the rate of excise duty charged in respect of the manufacture in Uganda of wine, whose local raw material content, excluding water, is at least 75 percent by weight of its constituents, shall be the rate of 20 percent.

6.   Partial remission on specified products.

   (1) The import duty under the Customs Tariff Act and the excise duty under the Excise Tariff Act, payable by a manufacturer in Uganda in respect of the items with HS Codes specified in Part II of the Third Schedule is remitted to 7 percent and nil respectively.

   (2) The remission under subsection (1) is granted on condition that—

   (a)   the items are to be used as raw materials for the manufacture of products for which the manufacturer is registered for value added tax purposes; and

   (b)   the manufacturer maintains premises, which are subject to customs control.

   (3) A manufacturer who uses the items referred to in this section in contravention of a condition specified in subsection (2) shall pay the normal import duty and excise duty on those items and is liable to penalties specified in the Customs Management Act and the East African Excise Management Act.

7.   Remission of import duty and excise duty on pharmaceutical products.

   (1) The import duty under the Customs Tariff Act and the excise duty under the Excise Tariff Act payable by a manufacturer in Uganda of pharmaceutical products or disposable syringes in respect of the items with HS Codes specified in Part III of the Third Schedule to this Act is remitted.

   (2) The remission under subsection (1) is granted on condition that the Drugs Verification Committee established under the National Drug Policy and Authority Act must verify that—

   (a)   the importer of the items is registered with the Pharmacy Board established under the Pharmacy and Drugs Act, as a manufacture of pharmaceutical products or disposable syringes; and

   (b)   the items are for use as packaging materials for pharmaceutical products or as raw materials for the manufacture of disposable syringes.

   (3) A manufacturer who uses the items referred to in this section in contravention of any condition stated in subsection (2) shall pay the specified import duty and excise duty on those items and is liable to applicable penalties specified in the Customs Management Act and the East African Excise Management Act.

8.   Conditional remission of import duty and excise duty on raw materials.

   (1) The import duty under the Customs Tariff Act and the excise duty under the Excise Tariff Act, payable by a manufacturer in Uganda in respect of the items with HS Codes specified in Part IV of the Third Schedule to his Act is remitted.

   (2) The remission under subsection (1) is granted on condition that—

   (a)   the items are to be used as raw materials for the manufacture of products for which the manufacturer is registered for value added tax purposes; and

   (b)   the manufacturer maintains premises which are subject to customs control.

   (3) A manufacturer who uses the items referred to in this section in contravention of a condition specified in subsection (2) shall pay the normal import duty and excise duty on those items and is liable to penalties specified in the Customs Management Act and the East African Excise Management Act.

PART IV
MISCELLANEOUS.

9.   Specific rates to apply to imported products only.

   The specific rate of excise duty of Shs. 25,000 per 1,000 sticks applicable an tobacco products with H.S. Codes 2402.10.90, 2402.20.90 and 2402.90.90 and the specific duty rate of Shs. 15,000 per 1,000 sticks applicable on tobacco products with H.S. Codes 2402.10.10, 2402.20.10 and 2402.90.10 specified in Part I of the Third Schedule to the Finance Act 2003 shall be deemed to have applied to imported products only.

10.   Amendment of First Schedule to the Finance Act 2003.

   The Finance Act, 2003 is amended in the First Schedule by inserting between the items "beer" and "sweets" the item "bread".

11.   Amendment of Part IV of Fourth Schedule.

   The Finance Act, 2003 is amended in Part IV of the Fourth Schedule by inserting immediately after product 170 the following—

First Schedule.

[REPEALED]

Second Schedule.

s. 3

PART I
AMENDMENTS TO PARTS I AND II OF THE THIRD SCHEDULE TO THE FINANCE ACT 2003 AND PART I OF THE SECOND SCHEDULE TO THE FINANCE (NO. 2) ACT 2002.

21.01

Extracts, essences and concentrates, of coffee, tea or mate' and preparations with a basis of these products or with a basis of coffee, tea or mate'; roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof.

Extracts, essences and concentrates, of coffee, and preparations with a basis of these extracts, essences or concentrates or with a basis of coffee.

24.03

Other manufactured tobacco and manufactured tobacco substitutes; "homogenised" or "reconstituted" tobacco; tobacco extracts and essences

27.10

Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70% or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils

33.01

Essential oils (terpeneless or not), including concretes and absolutes; resinoids; extracted oleoresins; concentrates of essential oils in fats, in fixed oils, in waxes or the like, obtained by enfleurage or maceration; terpenic by-products of the deterpenation of essential oils; aqueous distillates and aqueous solutions of essential oils