Kampala Traders Reopen Shops After Meeting with President Museveni

Kampala traders have agreed to reopen their shops after a meeting with President Yoweri Museveni, who directed the Uganda Revenue Authority (URA) to suspend penalties related to the Electronic Fiscal Receipting and Invoicing System (EFRIS) pending further consultations.

The meeting at State House Entebbe on Friday followed a strike by traders expressing discontent against URA's implementation of the EFRIS system.

During the meeting attended by 61 leaders of traders from Kampala and upcountry districts, the traders raised concerns that the EFRIS system imposes a high cost of compliance, is not well understood by most traders, and applies to all traders regardless of VAT registration. They requested the government to increase the VAT threshold from Shs150 million to Shs1 billion and reduce the VAT rate from 18% to 16%.

President Museveni informed the traders that he will meet with technocrats from the Ministry of Finance, Planning and Economic Development and URA on April 24, 2024 for wider consultations, and then meet with all the traders on May 7, 2024 at Kololo Ceremonial Grounds. In the meantime, he directed URA to suspend all penalties related to the EFRIS system.

Why this matters: The traders' strike and concerns over the EFRIS system highlight the challenges of implementing new tax compliance measures in Uganda. The resolution reached through dialogue with the President sets a precedent for addressing similar issues affecting the business community in the future.

The government also agreed to establish EFRIS support offices, exercise more sensitivity in its implementation, and refrain from issuing penalties for non-compliance as consultations continue. The Ministry of Trade said they are finalizing regulations to implement the Competition Law and have issued circulars to stop issuing hawking certificates to non-citizens.

Following the meeting with the President, the leaders of the traders, including those from the Federation of Uganda's Traders Associations (FUTA) and the Kampala City Traders Association (KACITA), agreed to reopen their businesses as they continue to consult further with the government. "We have agreed to resume normal business while the government consults on the issues raised," said a representative of the traders.

Key Takeaways

• Kampala traders agreed to reopen shops after meeting Museveni
• Museveni directed URA to suspend EFRIS penalties for further talks
• Traders requested VAT threshold increase to Shs1B and rate cut to 16%
• Museveni to meet technocrats on Apr 24 and traders on May 7, 2024
• Govt agreed to establish EFRIS support offices and exercise sensitivity