Kampala traders disappointed with outcomes of meeting with Museveni

Kampala city traders have expressed disappointment over the outcome of Tuesday’s meeting with the President, with many wondering why they even considered meeting the head of state in the first place.

On Tuesday at Kololo Ceremonial Grounds, President Museveni indicated to the traders that implementation of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), which they are against, will continue, saying is an enabler of the government’s efforts to wean itself from foreign borrowing to fund its budget through generating more in Value Added Tax (VAT). The President defended the VAT policy, saying it is aimed at fighting importation of products, which are already produced here.

But the traders say the President ignored their key concerns and reasons for their earlier strike.

“We (traders) had no win at Kololo. We are wondering why we even went there,” Thadeus Musoke, the chairperson of Kampala City Traders Association (KACITA), said in an interview on Wednesday morning.

While the President asked URA not to enforce strict penalties on delayed installation of EFRIS, Musoke insisted that the system is an unnecessary burden on the traders.

“We pay a lot of taxes. Traders are suffocated. So many of them are going to be driven out of business. One thing about EFRIS is that when you introduce new technology, its adoption is a process. EFRIS should have been a management system, but URA wants to manage our businesses instead.  These people want to know what sells most in Kikuubo and start up the same businesses to compete with us,” he said.

The traders were also complaining about the foreign investors who set up retail businesses in Kampala, outcompeting local businesses. But the President on Tuesday warned the traders against frustrating investors.

“We (traders) had no win at Kololo. We are wondering why we even went there,

Thadeus Musoke, chairperson of Kampala City Traders Association

On this, the KACITA chairperson said: “We shall not respect investors because these are the people who have driven us out of our markets.”

Joshua Mawerere, the Youth Leader, KACITA, said: “After yesterday’s meeting, traders were left feeling concerned and disappointed, particularly regarding the evaluation process and the lack of clarity in tax justifications which seem were not well addressed by the President. As traders, we affirm our commitment to fulfilling our tax obligations. Our difficulty lies in the fact that while Efris is an efficient stock system, it does not align well with the operational dynamics of businesses in Kikuubo.”

Nevertheless, Musoko said: “We might not have won on some of the issues we presented to the President; however, we have made a statement that we, as traders, know what we want.”

Kampala Central MP Muhammad Nsereko sided with the traders and expressed disappointment with the outcomes of the Tuesday meeting.

“If anyone has good will why meet 7,000 people not to come up with a solution? This was just political posturing. If the government insists, traders shouldn’t resist. They should also transfer the tax burden to consumers and then we shall get answers from the government,” Nsereko said.

“The only reason why traders are against EFRIS is because the taxes are high and they want to evade them,” he said.

The traders associations are opposed to the Efris, which they say the system is cumbersome during implementation and comes with heavy penalties when a mistake is made.

However, on Tuesday, the President ordered URA not to emphasise on traders buying the EFRIS gadget.

“I saw the EFRIS machine myself and I tried to use it. I think you can learn how to use it. But if you don’t want to use it, they say you can use your smart phone. You don’t have to buy an Efris machine of Shs6 million. What’s the cost of a smartphone!? You can use a smart phone and buy a printer of Shs150, 000 to attach to it. Therefore, I direct URA not to insist on EFRIS machine. The ones who can buy it let them buy, but those who can’t afford it should use alternative means. There should not be any penalties for not buying an EFRIS machines,” he said.

He also called on the business community to support national development by embracing taxation and import substitution.

“The issue is not whether we should pay the tax but when we should pay the tax. Now I would like to have flexibility, that if you can pay cash, pay. If you can’t pay later. Now what if the goods don’t get sold? I would like your leaders to sit with URA people and fine-tune that part and I can entertain you here on June 20, 2024 to tell us how they have fine-tuned that,” he directed.

Mr Museveni also said VAT is intended to fight imports.

“You talked about VAT. I have studied it and I don’t see the danger of VAT because of our big aims as a country and I have shown you that Uganda can stand on its own. I have given you the example of milk, cement, steel bars etc. You can see where we have been able to stand on our own without importing. Therefore, this tax which is partly concentrating on the narrow spectrum of imported products should not be opposed. You would be wrong if you opposed such a tax (VAT),” the President said.

One of the traders’ claims was that the government is doing nothing to protect local investors since it allows several foreign investors to start small-scale businesses in downtown Kampala and other parts of the city, which should be a preserve of the former.

But the President rejected the assertion.

“You say government doesn’t support local investors. That’s rubbish! We have 450 companies in Namanve. 315 of them are Ugandan; that’s about 70%. I told your leaders to stop importing since they had amassed enough wealth to start their own factories here. You said you had issues with acquiring land. Who frustrated you from acquiring land? You will need to tell us. You should stop that language [of demonizing foreign investors]. You talk like enemies of Uganda. The challenge we have is patriotism. There’s a Chinese who set up a factory in Kapeeka to make tiles. Intially, we used to import tiles. Some of your leaders like Issa Ssekito started cursing him. But his factory helped stop bleeding our economy through imported tiles,” he said.

It remains to be seen if traders will call off their strike and fully reopen their businesses. During the President’s speech, some traders were seen chuckling in disapproval of some of his remarks, while others walked out before the end of the function.