President Museveni Engages with Ugandan Traders on Tax and Trade Issues after a Week-long Standoff with Revenue Collector

Entebbe, Uganda — President Yoweri Museveni recently met with leaders of traders from Kampala and other districts at the State House Entebbe to discuss a range of pressing issues affecting their businesses following a week-long standoff over 'unfair' tax system imposed by parliament and being ruthlessly implemented by the Uganda Revenue Authority.

During the meeting, the traders presented several concerns, including high taxation on textiles, competition from manufacturers, issues with the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), and the threshold for Value Added Tax (VAT).

The traders highlighted the burdensome tax on textiles, which is currently calculated based on kilograms, making it prohibitively expensive.

They also expressed frustration over manufacturers who engage in both wholesale and retail, which they argue leaves little room for smaller traders and results in unfair trade practices.

Additionally, the implementation of EFRIS has been problematic for many, with penalties imposed for non-compliance, which they claim is unsuitable for their operations.

Another significant issue raised was the current VAT threshold, set at an annual turnover of Shs 150 million, which traders believe should be increased to better accommodate small and medium enterprises.

In response to these concerns, President Museveni posed a reflective question to the traders:

"Do we want to build our country Uganda or other countries by trading in goods produced by them?"

He emphasized the importance of retaining capital within the country rather than contributing to the economic success of others, referring to the ongoing financial outflow as a "haemorrhage" of the nation’s resources.

Acknowledging the complexity of the issues, President Museveni has asked for additional time to research and consult with technocrats on the matters raised. He has scheduled a follow-up meeting on May 7, 2024, at Kololo, where these discussions will continue.

In a significant interim measure, the President directed the Uganda Revenue Authority (URA) refrain from issuing penalties and to halt the recovery of any penalties that have already been issued concerning EFRIS compliance. However, he reminded traders that they must continue to fulfill their tax obligations as usual.

President Museveni's engagement with the traders reflects a proactive approach to addressing the challenges faced by local businesses, and his interim directives offer some relief as comprehensive solutions are sought. The upcoming meeting in May promises to be a crucial next step in resolving these critical economic issues.