Museveni to meet striking traders

Business owners seat outside their locked shops during a traders' strike against unfair taxes and URA's Electronic Fiscal Receipting and Invoicing Solution (EFRIS) system on April 16, 2024 in Kampala. PHOTO/MICHEAL KAKUMIRIZI

What you need to know:

  • Traders are striking over grievances regarding taxation and government policies that are adversely affecting their businesses.

President Museveni is reportedly set to meet leaders of striking traders on Friday to explore ways of resolving their grievances as the strike, which began in Kampala a week ago, spread upcountry.

Businesses in Kampala closed shop, or proprietors found arcade owners had locked them out, following a rallying call by Kampala City Traders’ Association Uganda (KACITA Uganda) and the Federation of Uganda Traders’ Association (FUTA).

KACITA, which originally started as an umbrella grouping of traders in the capital, was re-registered in 2019 with a country-wide membership and outlook, giving it wider clout.

Its chairman, Dr Thadeus Nagenda, told this publication that State House, which we were unable by press time to reach for confirmation, asked them to undertake Covid tests today ahead of the expected talks with President Museveni.

In a petition to Finance Minister Matia Kasaija, KACITA outlined a dozen complaints, including ongoing enforcement by Uganda Revenue Authority (URA) to onboard the traders on its digital invoicing and receipting tax system.

URA spokesman Ibrahim Bbosa did not receive or return our telephone calls. Countrywide surveys by this newspaper showed that traders in regional cities such as Fort Portal, Mbarara and Mbale for various reasons shunned the civil disobedience.

In Masaka, Mr Ali Pio Mukasa, a representative of Kikuubo traders to Masaka City Traders Association (MACITA), said they last week stayed the strike following assurances by Mr Ahmed Kateregga, a deputy resident city commissioner. 

MACITA publicist Joachim Kizito, however, said the promised government intervention never happened, prompting them to resume the strike.

In Mukono, all major businesses ranging from supermarkets, pharmacies and retail shops remained closed.

Mr John Musisi, a hardware dealer, said their businesses have been suffocated with the introduction of EFRIS, which does not cater for other losses and challenges faced by business owners in their day-to-day business.

Elsewhere, butcheries opened, but it was intended for owners to remove meat from refrigerators.

Ms Mable Wayera of Kisekka Auto Centre said their shops would remain shut until URA released their retained containers. “Uganda has become a tax-heavy country, customers are complaining because they are buying things expensively. We want to operate, but the taxes do not allow us to,” he noted.

Mr Ssenide Issa, a trader, said whereas he knew he would not work, he just left home to avoid conflicting with his spouse.

“We just came [into the city centre] to monitor our shops and also to hide from our wives. But at the end of the day, I am going back empty-handed,” he said.

Mr Frank Ssekajimu, a boda boda at Kisekka Market, said he had not made any deliveries to customers, “because our bosses closed their shops”.

“We are sitting watching the army walking around. The only way is to cry to the government to address the issues of the traders, and we also need to work because we shall also be forced to react on behalf of traders or bosses,” he said.

Mr Moses Ssentongo, who deals in men’s suits, said the government should expedite the resolution of the traders’ grievances.

“I didn’t know that arcades would be locked. But when I came in the morning, I couldn’t access my shop. We are not working, yet we have rent to pay and families to feed. I appeal to the President to come to our rescue as soon as possible,” Mr Ssentongo said.

Mr Juma Mukwaya, a garments seller, decried the delayed government response to their plight. 

Mr Fahad Mugabi, an 18-year-old orphan, who takes care of his four siblings and works as a broker, said the strike is a blow to menial labourers who work hand-to-mouth.

“What affects my boss affects me too.  We have not opened today, and this means I will not have money for lunch, transport and food for my siblings [since] I survive on a commission,” he said.

Leaders say

Mr Farooq Miya, the vice chairperson of  Mukono Traders Association (MUTA), said once a mistake is done in filing taxes on EFRIS, the trader is fined Shs6 million.

“Can a trader with capital of Shs30 million remain in business if he has been fined twice a week or a month? The President must meet the business community in general and listen to them,” he said.

MUTA chairperson Vincent Lukwago urged traders to sustain the strike, even if for a month, because “we pay a number of taxes before bringing goods into our shops, but still the government insists on taxing us as we sell to customers which is so unfair …”

Mr  John Kabanda, the president of the Federation of Uganda Traders Associations (FUTA), said they would only reopen shops after meeting President Museveni as earlier promised.

“All traders, be strong and calm, and also avoid being in town. We want the government to respond to the questions of traders,” he said.

Mr Godfrey Katongole, chairperson of  Kampala Arcades Association, appreciated the landlords and traders for the civil disobedience.

“Today it’s a warning; we don’t know what will happen next to traders because a hungry man is an angry man indeed; the government should hurry to respond to our concerns regarding EFRIS and the influx of [foreign traders],” he said.

Other districts

In Mubende, wholesale shops on main roads in the town remained closed. Mr Robert Ssenyonga, a trader, said he had paid more than Shs3m in taxes since start of the year, and wondered what his tax bill would be by year end.

In Wakiso, businesses in the townships of Nansana, Kayunga, Kakiiri and Namaumba operated normally.

Mr Ronald Kiboowa, a plastics and scholastics dealer, said he had shunned the strike because he has loan obligations to meet.  “I have four bank loans and if I close my shop, the bank will take my property,” he said.

His counterpart in Kakiri, Ms Flora Namakula, echoed similar concerns.

In Mbale City, businessman Yahudu Masaba, said: “We have loans which we pay back, others on a daily basis, so if we close up our businesses how are we going to get money to pay back”? 

Mr Muhamadi Magomu, another trader, blamed the “poor and lacking” leadership of traders in the city for the staggered start to the civil disobedience.

“Nobody mobilised us,” he said, “but if they did we would have joined because high taxes are oppressing us and making us poorer.”

On Republic Street, businessman Kassim Omagolo questioned the logic of the government providing tax holidays and other incentives to foreign investors while allowing its own citizens to choke on taxes. 

Mr Kamadi Musoli, an official of Mbale City Traders Association (MACITA), noted that plans are underway for them to join the strike, citing “income taxes, trading licence taxes, garbage taxes, street packing taxes and so many more which at the end of the day, are affecting both traders and the local people”.

In Soroti City, businesses were uninterrupted despite traders acknowledging that they were choking on high taxes.

Mr Joseph Auta, a supermarket attendant, said the strike was a Kampala affair while wholesale dealer Annet Agoru asked the government to reduce the “high taxes” levied on traders.

In Mbarara City, the traders’ association leader Simon Mwijuka said they stayed out of the strike due to a pending engagement with the government this week.

“We are in agreement with the strike because of unfair taxation, but we have a three-day business symposium, starting [today],” he said, adding that the outcome will determine their next course of action.

According to Mr Ambrose Mwesigye, a whole seller, the taxation system in Uganda is killing businesses.

Ms Angella Atukwatsa said “we are more than willing to join the strike if we get mobilised because the taxation system is very unfair”.

“URA wants taxes, city council wants taxes. They are pushing us out of businesses,” she said.

In Fort Portal City, businesses opened to customers. Mr Yasin Mujuni, a dealer in electronics, said: “We’re not joining the strike because our businesses are not as large as those of our colleagues in Kampala”.

Ms Anent Atuhaire, another whole seller, said their leaders had not rallied them for civil action.

 Traders’ grievances

lValue-Added-Tax (VAT) threshold of Shs150m, set in 1996, be revised to Shs600m owing to depreciation of the Ugandan currency  over past 28 years. 

 l   The 18 percent VAT is too high, and should be reduced to 16 percent as in Kenya.

l Costs for informal businesses to comply with Electronic Fiscal Receipting and Invoicing Solution (EFRIS) prohibitive, and  method  it should be restricted to VAT-registered businesses, particularly factories.

l  Shs6m penalty per imposed per EFRIS-related error or non-compliance discourages prospective users from adopting the technology and enforcement brutal.

 l Imposition of import duty of $3 (Shs11,100) to $3.5 (Shs13,000) per kilogramme of textile fabric and garment, respectively, unsustainable.

   l Non-standardised valuation guidelines for both imported and exported goods.

l  Unfair competition due to foreign manufacturers opening up distribution, wholesale and retail shops as well as hawking upcountry.

l  Unprofessional enforcement, corruption and double standards by Uganda Revenue Authority staff.

l High interest rate on loans (18-36 percent) makes local credit expensive, enabling foreign bankrolled enterprises to crowd out indigenous entrepreneurs. 

l  Loss of regional markets, with Congolese, Rwandan, South Sudanese, Burundian nationals shifting to purchase merchanide directly from Kenya. 

Extracted from petition Kampala City Traders’ Association Uganda (KACITA Uganda) chaiman, Dr Thadeus Nagenda, presented to Finance Minister Matia Kasaija.

Compiled by Karim Muyobo, Jane Nafula, Al Mahdi Ssenkabirwa, Diphas Kiguli, Richard Kyanjo, Barbra Nalweyiso, Enock Matovu, Malik Fahad Jjingo, Joseph Kiggundu, George Muron

Rajab Mukombozi, Felix Ainebyoona, Alex Ashaba, Olivier Mukaaya & Fred Wambede.