The Ugandan government has ordered the tax authority to waive taxes on diesel used by large scale manufacturers to power 100 KVA generators and above amid biting power crisis across the country.

Following President Yoweri Museveni's directive effective on Tuesday, the manufacturers would relieve a little bit from the losses caused by the high expenses of maintaining the generators.

The directive to Uganda Revenue Authority (URA), quoted by the state-owned New Vision daily on Thursday, aims at reducing the cost of production that had jumped up in the last three months of intensified electricity load shedding.

The move came days after manufacturers under Uganda Manufacturers Association (UMA) complained of the delay in implementing the tax waiver, which they claim the president had promised them earlier.

Manufacturers had said the 42 months within which the government promised to sort out the power problem was too long for them to remain in business without a short term solution.

Abid Alam, UMA's board chairman, said it was good news because the waiver had delayed while the cost had gone up by about 50 percent, forcing many out of business.

"We were very concerned that the government had not implemented the promised waiver to mitigate the power problem that has more than affected manufacturers in the country. It is not the end of the problem, but it is a step forward," said Alam.

"URA fears loss of revenue to the tune of 9.5 billion shillings (about 5 million U.S. dollars) per month accruing from the waiver, " the report said.

The deepening power crisis Uganda is facing has forced manufacturers to resort to generators, which they said were expensive to run and pushed up the costs of production.

Peter Malinga, URA's commissioner for customs, said, "We are meeting officials of the UMA and the oil companies to find how we can implement the directive since it is with immediate effect."

Source: Xinhua