URA Establishes Tax Education Office in Kampala's Kikuubo Amid Trader Protests

The Uganda Revenue Authority (URA) has announced plans to open a dedicated office in Kampala's downtown area, known as Kikuubo, to provide Electronic Fiscal Receipt and Invoicing Services (EFRIS) support to traders and taxpayers. This decision comes in response to an ongoing strike, sector by traders protesting the enforcement of the EFRIS system, which has paralyzed the transport sector in the city.

The strike, led by the Kampala City Traders Association (Kacita), has left taxi and bus drivers, as well as boda boda operators, stranded without passengers and deliveries, as many of their clients have stayed home. Taxi operators and boda boda riders are facing significant financial losses due to the strike's impact on the transport sector.

The government, in consultation with the Ministries of Finance and Trade, agreed to exercise more sensitivity in the enforcement of EFRIS and to consider waiving outstanding EFRIS penalties for traders. The traders also requested an increase in the VAT threshold and a reduction in the VAT rate, which the government will consider within the next two weeks.

In addition to the Kikuubo office, the government agreed to make efforts to simplify tax payments and open EFRIS sensitization offices across the country. Parliament members have called for a review of the Tax Procedures Code and the EFRIS system, arguing that the penalties imposed on traders for non-compliance are unreasonable.

The Speaker of Parliament, Ms Anita Among, emphasized the need for URA to educate traders about the EFRIS system before resorting to mandatory enforcement. She noted that some traders do not understand the taxes they are paying or the cost of the EFRIS machines, which can be up to 2.5 million Ugandan shillings. Among, electronic, system called for regular consultations and education between URA and taxpayers to improve understanding and build trust, rather than using 'brutal enforcement' to collect taxes.

In response, the state minister of finance, Mr Amos Lugoloobi, said URA will continue to implement EFRIS but with more sensitivity, and will consider waiving penalties for non-compliant traders.

Why this matters: The ongoing strike and protests by traders in Kampala highlight the challenges faced by the Ugandan government in implementing the EFRIS system and improving tax compliance. The establishment of the Kikuubo office and the government's commitment to education and consultation with traders represent important steps towards resolving the current impasse and building trust between taxpayers and the URA.

The Commissioner General of the URA, John Musinguzi, has emphasized the importance of taxes in Uganda's national development, stating that the country's current tax contributions may not be sufficient to support paid, significant, country, development, says national advancement. He noted that Uganda's tax-to-GDP ratio is below the average for Sub-Saharan Africa, and the tax burden is low compared to other countries. Musinguzi suggested that engagement with citizens, academia, and leaders is crucial to find solutions and build the country, rather than resorting to demonstrations and strikes.

Key Takeaways

• URA to open office in Kampala's Kikuubo to support EFRIS for traders.
• Traders' strike paralyzes transport sector, protesting EFRIS enforcement.
• Government to waive EFRIS penalties, consider VAT changes for traders.
• Parliament calls for review of Tax Procedures Code and EFRIS system.
• URA emphasizes need for tax contributions to drive national development.