Traders announce countrywide strike

City traders, under their various umbrella bodies, led by Kampala City Traders Association (Kacita), have announced a nationwide closure of shops.

The traders are protesting the enforcement of Electronic Fiscal Receipting and Invoicing Solution (EFRIS) by the national tax collector, Uganda Revenue Authority (URA).

The business owners say the strike, which resumes today, will not end unless the President responds to their concerns.

Last week, many small and medium-sized business owners shuttered their doors, objecting to the newly-imposed tax regulations under EFRIS, which demands that traders pay taxes based on weight of goods.

The traders were also challenging the influx of foreign investors who they accuse of immersion in retail trade and unfairly squeezing out local traders and wiping out their retail profit margins.

Mr Thadeus Musoke Nagenda, the chairman of Kacita, told a press conference in Kampala yesterday that their discussions with tax authorities on the burning issues had not yielded the expected results.

“Starting today, no shops will be open across the country. We appeal to the traders; we know it’s not easy, but we must collaborate to ensure the government respects the views of the traders,” Mr Musoke Nagenda said.

Kacita, which was registered in 2001, is a business support association in Uganda.  It was re-registered in 2009 as Kacita – Uganda with the mandate to cover the whole country to facilitate trade, bring together the business community, and mobilise them into a viable, organised, and socially sustainable marketplace. 

Mr Musoke Nagenda said the URA taxes affect all these traders across the country.

The local traders are also challenging what they see as non-standardised URA valuation guidelines for imported and exported goods, which they argue hinder effective business planning and disadvantages them against their regional counterparts.

Mr Musoke Nagenda said: The government has been urging us to halt the protest, citing offers already provided, such as URA advising us to reopen shops to have the penalties waived.” 

He revealed that URA had yielded and removed fines on confiscated containers and had instructed traders to only pay taxes on the containers.

“The traders rejected these offers because they make the clearance of containers very expensive as they are still charged by weight. We have convened this emergency meeting to address rumours circulating that KACITA has cancelled the demonstration. I want to confirm that we have held several discussions and resolved various views and ideas as a team,” Mr Musoke Nagenda said.

The traders said the Minister of Kampala had informed them that the President would meet them on Friday. However, they demanded that the minister come with a written statement or formal communication to that effect.

They said they won’t reopen their shops until the unprofessional conduct of the taxman’s enforcement officers and the high-interest rates imposed on local businesses, ranging from 17 to 36 percent is addressed

Mr Muhammad Kalyango, a trader at Ham Shopping Centre downtown, dismissed the claims that the tenants had been dissuaded from joining the protests last week.

“Landlords operating in the city centre understand the traders’ plight as many of their arcades remain empty due to the pressure from revenue authorities that force the tenants to leave,” he said.

Mr Kato Mayanja, a trader at Container Village in the city centre, said he is protesting URA’s threshold of an annual turnover of Shs150m for EFRIS enrollment, but wants the threshold increased to at least Shs1 billion.

“The current 18 percent VAT rate, imposed on each of our goods is transferred to the next trader or business and amounts to double taxation and limits their competitiveness in the region, especially against Kenya, whose VAT is at 16 percent,” Mr Mayanja said.

He said the high import duty on textiles and garments which stands at $3.0 and $3.5 per kilogramme, respectively, increases the cost of doing business and leads to smuggling and results in numerous uncleared containers at URA facilities.
 
Police warn
Mr Luke Owoyesigyire, the Deputy Kampala Metropolitan Police spokesperson, said they will deploy fully at different places across the city so that those who are working can do so without any hindrance.

“The information is that those that have failed to close their shops after the announcement by different groups of traders are going to be attacked by thugs and beaten up, which we are not going to entertain,” he warned.

“We are appealing to them that they shouldn’t force other members of the public or other traders who do not want to close their shops,” he added.

Mr Owoyesigyire said those who have closed shops for fear of being attacked should open them because the police shall ensure they are protected.

“You should only close your shops if you want to because you are scared that you are going to be attacked by thugs,” he said.

URA’s new revenue target
Last week, Ms Anita Among, the Speaker of Parliament, directed the Ministry of Trade, and that of Finance, to resolve the woes of Kampala City Traders and report back to Parliament today.

URA is expected to collect taxes worth Shs31.574 trillion to finance the 2024/2025 national budget, which is an increase of Shs1.9 trillion from the current target of Shs29.672 trillion, the Authority is expected to collect in FY 2023/2024.

Mr Henry Musasizi, the minister of State for Finance, told Parliament that to achieve this projected target, URA will continue to undertake various reforms, including the rollout and enforcement of the electronic receipting and invoicing solutions.

“The objective of this reform is to ensure that taxpayers can keep clear records, file returns promptly and efficiently assess their VAT.  I call upon every Ugandan to support this cause,” Mr Musasizi said.

The government is proposing to raise spending by 10 percent to Shs58.3 trillion in the upcoming FY 2024/2025 amid concerns of budget cuts, including at Parliament.