Museveni defends tax system, urges traders to embrace local production, exportation

President Yoweri Kaguta Museveni has disagreed with traders who claim that there are too many taxes in Uganda, stating that the country’s tax system is deliberate and aimed at promoting local production and exportation.

Speaking at a meeting with traders from Kampala and upcountry districts at Kololo Ceremonial Grounds on Tuesday, May 7, 2024, the President said, “The first claim is that there are too many taxes in Uganda. This is not true, and that is why I’m here to talk with you.”

The President explained that the government does not tax exports and has abolished taxes on internal trade produce, except for licenses.

The President emphasized that the taxes on imports of consumer goods, excluding essential categories like medicine, machinery, intermediate products, and pharmaceuticals, are deliberate. He attributed the confusion among traders to a lack of clear explanation from the Uganda Revenue Authority (URA).

“I’m here to clarify these distinctions because URA hasn’t done a good job explaining it to you,” President Museveni said. “Our taxes on non-essential imports are deliberate, and we must support local production and exportation.”

Traders have been protesting against what they call unfair taxes imposed by the Uganda Revenue Authority (URA) and the implementation of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS). However, the President stated that the government’s policy on taxes is deliberate and aimed at promoting local production and exportation.

The President also emphasized that the government has been able to register success in the dairy sector and currently, Ugandans have been able to set up factories and added value to the milk and beef.

The meeting was attended by traders from various associations, including the Kampala City Traders Association (KACITA), the Federation of Uganda’s Traders Associations (FUTA), and the United Arcade Traders Entrepreneurs Association (UATEA). The traders raised concerns over high taxes, EFRIS, and foreign banks’ high interest rates.

The President tasked the traders to work with the URA to fine-tune the EFRIS system and address their concerns. He also stopped penalties for non-performance and urged traders to be sensitized to the new process.

The Minister for Kampala Capital City and Metropolitan Affairs, Hajjat Minsa Kabanda, thanked the President for listening to the traders’ concerns, while the Chairperson of KACITA, Dr. Thadeus Musoke Nagenda, requested the President to meet with traders annually for constructive interactions.

The Tuesday meeting aimed to address the traders’ concerns and find solutions to promote local production and exportation, while also emphasizing the government’s commitment to supporting local investors and promoting economic growth.