In brief: What Gov’t, Traders discussed in crisis meeting

The government has asked traders to return to work as they consult on a way forward to address their grievances against Uganda Revenue Authority and related business concerns. 

Ministry of Finance, Economic Planning and Development, Ministry of Trade, Industry and Cooperatives and representatives of traders held a meeting April 16 following a protest by traders who have since closed shops in downtown Kampala, Masaka and Luweero. 

The concerns of traders

In a statement by the Finance ministry, the traders want the government to increase Value Added Tax threshold to Shs1 billion from Shs150m. The traders also want VAT reduced from 18% to 16%.

Concerning the implementation of e-receipting system known as the Electronic Fiscal Recepting and Invoicing System (EFRIS), traders complained about the prohibitive cost of compliance noting that even non-VAT registered businesses were being rolled for the service. They also noted that they don’t understand how the system works. 

Traders asked the government to reduce the import duty on fabrics and garments arguing that the 35% or $3.5 per kg, whichever is higher for textile and garment, respectively is too high. 

The business community accused URA of having a non-standardised valuation guideline for goods, noting that the taxman charges different importers different values for the same imports. 

They bemoaned the unfair business environment favoring foreign nationals who are participating in all levels of business from manufacturing, distribution, wholesale, retail, and hawking. 

Traders tasked government to improve competitiveness of the Ugandan market in the region noting that there is a shift to the Kenyan market which has relatively lower prices. 

What Gov’t and Traders agreed

In the meeting, it was resolved that the government will review and consult before making official its position in the next two weeks. 

Meanwhile, URA has been advised to conduct tax education especially in the use and implementation of the e-receipting system. Furthermore, URA has been tasked to set up tents downtown to teach traders as they continue rolling out EFRIS to eligible traders. 

As of April 17, traders are protesting with several shops downtown closed. There are also reports that traders are seeking for a meeting with president Yoweri Museveni on the matter this week. 

The protest was triggered by the implementation of EFRIS which several traders claimed was another form of tax.

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