Traders in downtown Kampala close shops in protest over ‘unfair’ taxes

Several traders in Kikuubo and other areas in downtown Kampala on Monday did not open their shops in protest against what they describe as unfair taxes imposed by the government as well as growing competition from the Chinese businessmen.

Some of the traders who spoke to Kikubolane said they are protesting against the unfair tax policy on EFRIS, the digital tax verification method being used by URA, the 18 percent VAT, and allowing foreigners to engage in similar businesses like Ugandans.

 Most of the closed businesses in Kikuubo are affiliated with the Federation of Uganda Traders’ Associations (FUTA), which advocates for the interests of the business community in the central business district.

“While we are not against the system itself, the taxes imposed on us are excessively high, and the way the system is being enforced is unjust,” one of the traders who requested not to be named said

“KACITA has been around for years, but it seems they haven’t been very helpful to us traders. Many of us haven’t been sensitized, particularly about the EFRIS framework system, and we are surprised that they are in support of a system that is paralyzing the traders,” Godfrey Katongole, Chairman Kampala Arcade Traders, explained.

John Kabanda, the chairman of the Federation of Uganda Traders’ Associations (FUTA), expressed frustration over the lack of solutions from the government despite several meetings with responsible authorities. He accused other associations like KACITA of siding with the government instead of supporting the traders’ concerns.

“We cannot manage the high taxes and double taxation, such as the EFRIS  system. While it may be suitable for manufacturers and large suppliers,  as traders in shops, we cannot handle it. That’s why we are closing our shops, and if this continues, we will have to shut down the entire country.”

Police remained deployed in the area on Monday morning ready to quell any threat of violence.

Despite several engagements with URA, Private Sector Foundation and Finance Ministry officials, the traders say their concerns have not been addressed. The threats to strike have been in plan for sometime.

Over the weekend, URA and PSFU held a meeting to address the issues at hand, emphasizing the importance of continued dialogue and engagement among stakeholders. It was agreed that URA, in collaboration with PSFU, will open an office in Kikuubo to provide business support services and address tax-related matters.

John Musinguzi, the URA Commissioner General, reiterated that EFRIS is not a new tax policy but a tax administration measure aimed at collecting VAT. He emphasized URA’s readiness to review operational concerns and urged traders to adopt voluntary compliance measures.

Kampala City Traders Association (KACITA) on Sunday called off the traders’ demonstrations.

According to Thadeus Musoke Naggenda, the Chairperson of KACITA, all traders operating in Kampala were allowed to open up their businesses and attend to their customers.

He asked traders not to be intimidated by those who are masquerading as leaders of the association and mobilizing traders to stage a strike.

He added that the association has informed the police to provide tight security to traders who wish to open up their shops to serve their customers, so as to protect them against any possible danger.

“As KACITA, we have received several petitions from our members and the public inquiring about the demonstrations allegedly to happen on Monday, April 8, 2024. We have also received complaints from members who don’t believe in the principle of demonstration that they are receiving threats from some groups of traders who are said to be planners of the demonstration. I want to assure the traders and Uganda at large that, as KACITA, we value dialogue and utilize all avenues to make sure that we advocate for a fair trade policy and a conducive trade environment,” Naggenda said.

Naggenda made these remarks during a press conference held at the Central Park Hotel in Bukoto, Kampala, on Sunday, April 7, 2024.