Traders in Kampala, the capital city of Uganda, have taken the drastic step of closing their shops to protest what they perceive as an unfair tax system imposed by the Uganda Revenue Authority (URA). Their primary grievance centers around the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) introduced by the tax body to prevent traders from evading Value Added Tax (VAT) on their sales.
The traders argue that while they support efforts to prevent tax evasion, the current implementation of EFRIS has led to what they consider double taxation. Specifically, they object to the 18% VAT rate imposed on each transaction as goods move from one trader to another or to the next business entity. They assert that this taxation scheme not only hampers their competitiveness in the regional market but also places an undue financial burden on their businesses.
Reports from the ground indicate that the situation in Kampala’s business district has escalated, with instances of unrest and street protests. Some traders have resorted to burning tires and engaging in confrontations with law enforcement officers deployed to maintain order. Tear gas has been deployed to disperse crowds, and there are efforts to contain the situation.
The unrest appears to be gaining momentum, with indications that the protest may extend beyond Kampala to other parts of the country. Traders are reportedly planning a nationwide sit-down strike today, followed by a march to the Ugandan Parliament tomorrow to present their grievances formally.
Amidst the protests, traders have expressed frustration with what they perceive as high taxation levels, including exorbitant import duties that, according to them, reach as high as 75%, far exceeding what they deem reasonable. They emphasize the need for a fairer tax system that supports business growth and economic development rather than stifling it.
The standoff between traders and the government highlights broader concerns about taxation policies and their implications for businesses and the economy. Both sides face the challenge of finding common ground and addressing the underlying issues to ensure a sustainable and equitable tax system that benefits all stakeholders.
