Reduction in tax burden is boost for Ugandan farmers

Thanks to a successful lobbying process, cooperatives in Uganda will soon no longer have to pay any taxes. This result was achieved by the Uganda Co-operative Alliance (UCA) and Agriterra, making successful use of the Agriterra-developed FACT method to do so.

Savings and credit cooperatives are the engine that drives rural development in Uganda. Unfortunately, they often mean a high tax burden for limited (financial) clout. Armed with a broad and well-substantiated proposal, UCA hit the road to secure an exemption. It worked: the government agreed to abolish taxes for cooperatives soon after the meeting.

The FACT method
After the success in Uganda, this method is being applied in more lobbying activities. The approach consists of 4 phases:

1. Member consultation for an extensive support basis
2. Participatory research
3. The development of effective (SMART) proposals
4. Targeted political lobbying

In practice
UCA kicked off with an extensive survey. By getting a large number of cooperative members involved in the process, the arguments became more persuasive. This comprehensive consultation process forms the foundation of the research on which the proposals are based. The UCA drafted these proposals in consultation with a number of other large cooperatives.

The result is a wide-ranging proposal, the core of which is a compensation concept for the desired tax exemption, designed to be an attractive option for the administration. The cooperatives are offering to invest in a new national cooperative bank, which the administration is keen to have. The government had budgeted for an injection of public funds totalling 15 million Ugandan shillings for this project. The compensation concept allows the government to free up this amount for other development projects.

Guaranteed contact partner
The extensive lobbying process has won the cooperatives broad support for their proposal. UCA has emerged as a contact partner for local administrations, ministries and parliament. Due to the fact that elections were approaching in 2015, it became a question of getting things done. Ultimately, the efforts seem to deliver results. Following various discussions, meetings and written petitions, the Ugandan president addressed a letter to the government in which he requested for taxes to be abolished for cooperatives.

UCA also employed the FACT method to raise awareness of a number of other issues faced by cooperatives in Uganda. This resulted in a wide-ranging petition of 10 points of action, which was actually presented to parliament in 2016.

Lobbying works!
Agribusiness Manager at UCA, Ivan Asiimwe, is very proud of the lobby result. Asiimwe: "To lobby successfully, it's important to work in a structured manner with all stakeholders at all levels. This helps you build up your integrity and credibility, and to bring relevant issues to the forefront in a well-substantiated way. It's a good idea to keep in mind the interests of the parties to whom you're lobbying so you can offer attractive alternatives, rather than simply asking for something. All of these points can be achieved with the FACT method."