Overview:
Under their umbrella body, the Uganda Dealers in Used Clothes and Shoes Association, the traders said that URA has made it a habit to keep increasing taxes on their business without any consultation.
Dealers in second hand clothes have accused the Uganda Revenue Authority (URA) of illegally increasing the taxes levied on their imports.
Under their umbrella body, the Uganda Dealers in Used Clothes and Shoes Association, the traders said that URA has made it a habit to keep increasing taxes on their business without any consultation.
“On November 5, 2022 we woke up to disheartening news about a tax increment in our business. URA has made it a habit to increase values (CET rates) of used clothes and shoes even when they are not backed by policy amendments and or the East African Community Management Act,” Andrew Rubeihayo, the chairperson of the Association, told journalists at a press conference in Kampala on Sunday.
He said for instance, URA has increased taxes from $0.89 per kilogram in January 2018 to $1.17 per kilogram in 2022.
The levy on shoes has also reportedly hiked from $1.37 per kg to $1.41 per kg and bags from $2.27 per kg to $2.34 per kg.
Rubeihayo said between April 2021 and November 2022, URA has increased taxes thrice and the latest increment was instituted without either warning or notice.
“There was an increase of $0.04 per kilo resulting into roughly Shs4m to Shs5m per container on top of what the traders were already struggling to pay,” he said.
“We have written to URA and expressed our disappointment not forgetting the hard times that we are going through with increased cost of goods from origin, high freight charges, runaway inflation, a weak shilling over the years and yet URA uses a high forex rate for valuation,”
Amon Mwesigwa, Association’s Treasurer
Amon Mwesigwa, the Association’s Treasurer, said that over 120 containers are currently stuck at different ICDs pending clearance.
“Some traders have resolved to re-export the containers to other countries as they can’t incur losses; we are also planning to close the shops over the same,” he said
“We have written to URA and expressed our disappointment not forgetting the hard times that we are going through with increased cost of goods from origin, high freight charges, runaway inflation, a weak shilling over the years and yet URA uses a high forex rate for valuation,” he said
The used clothing business according to the association, employs over 1.5 million people both directly and indirectly, contributing to a huge percentage of the much needed income to the government.
“The huge disparity in taxation with our neighbours has led to revenue loss to government as some unscrupulous traders opt to smuggle in clothes from the neighboring countries or migrate to trade in those countries,”
URA was yet to respond to our request for comments on the matter.