Kampala City Traders Protest High Taxes and New Revenue System

Traders in Uganda protest new tax system, leading to widespread business closures. Government negotiating with traders to find a solution, as the strike impacts the economy.

Trim Correspondents
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Kampala City Traders Protest High Taxes and New Revenue System

Kampala City Traders Protest High Taxes and New Revenue System

Traders in Kampala , Uganda have been on strike since April 8, 2024, protesting the enforcement of the Uganda Revenue Authority's (URA) Electronic Fiscal Receipting and Invoicing Solution (EFRIS) system. The traders, represented by the Kampala City Traders Association (KACITA), claim they were not adequately sensitized about the system and lack the necessary infrastructure to comply with it.

The strike has led to the closure of numerous shops in downtown Kampala, with businesses including shops , butchers, bakers, and eateries shutting their doors. The protesters are also angry about high interest rates, taxes (including 18% VAT), and a new levy on imported clothing. They argue that the tax burden is too high and accuse government officials of embezzling funds.

The Ugandan government, through the Ministry of Trade, Industry and Cooperatives and the Ministry of Finance, is currently negotiating with the traders, time to find a solution. Minister of State of Trade, Industry and Cooperatives, David Bahati, informed Parliament that a statement on the progress will be presented on April 17, 2024.

Why this matters: The ongoing strike is having a significant impact on Uganda's economy, with businesses across major towns and cities shutting down. The protests also reflect broader political discontent, with traders arguing that the government has failed to fulfill its social contract with the people.

Speaker of Parliament, Anita Among, reiterated the urgency of resolving the traders' concerns and recommended constructive dialogue between the URA and the traders. Opposition Leader, Joel Ssenyonyi, emphasized the need for the government to expeditiously address the issue. Member of Parliament, Joseph Ssewungu, proposed halting the EFRIS system in the interim while a long-lasting solution is sought and providing training to the traders.

During a parliamentary plenary session, Ssenyonyi warned that simply merging organizations without addressing underlying inefficiencies would only exacerbate existing problems. He stated, "merging entities will not deal with the inefficiencies for as long as we don't deal with human resources," and cautioned that the government would be "merging problems" if it did not address these issues.

As negotiations continue between the government and KACITA, traders remain on strike, demanding subsidies and support for their businesses instead of high taxes. The government claims the new EFRIS system is for the good of businesses, but traders argue that compliance costs are too high. The outcome of these discussions will have significant implications for Uganda's business sectors and the economy as a whole.

Key Takeaways

  • Kampala traders protest enforcement of Uganda's EFRIS tax system since April 2024.
  • Traders argue they lack infrastructure and were not adequately informed about EFRIS.
  • Protests lead to closure of shops, businesses across Kampala over high taxes and costs.
  • Government negotiating with traders, plans to present progress update to Parliament on April 17.
  • Protests reflect broader political discontent, with calls to address inefficiencies and compliance costs.