President Museveni has directed that all penalties should be suspended by the Uganda Revenue Authority (URA) for the meantime to give room for wider consultations.
He issued the directive during a Friday meeting with traders at State House Entebbe.
This follows a five-day business closure by traders protesting multiple taxation through EFRIS, a system introduced by URA to aid in tax collection.
Electronic Fiscal Receipting and Invoicing Solution (EFRIS) is an automated compliance process established by the URA which aims to handle the allocation and centralized tracking of all invoices and receipts by specified taxpayers in Uganda.
URA implemented EFRIS in a quest to enable compliance and improve efficiency for e-Invoicing and VAT reporting of commercial transactions.
According to the mandate, all VAT-registered taxpayers are expected to use EFRIS to issue e-invoices or e-receipts for every business transaction.
Traders woes
The traders told President Museveni that the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) is not suitable for most of them and when they don’t use it they are penalized.
They said the threshold for Value Added Tax (VAT), which is currently an annual turnover of Shs 150m, should be increased.
The tax on textiles calculated based on kilograms is high and that manufacturers who engage in wholesale and retail leave no room for traders to do business, resulting in unfair trade.
“Traders should answer the question:
Do we want to build our country Uganda or other countries by trading in goods produced by them?” Museveni wondered after the meeting.
He added: “Must we continue to cause a hemorrhage of the little that we have made through agriculture and other sectors by sending our money outside? Uganda should not be a supermarket for other countries.”
The president asked the traders to give him time to research more and consult the technocrats on all the concerns they raised. He will then meet them all on 7th May, 2024, at Kololo to discuss further.
“It is good they have agreed to open up their businesses as we continue to find solutions to the issues raised.”
The delegation of 61 leaders was led by Mr. Kabanda John, the leader of the Federation of Uganda’s Traders Associations (FUTA) and Dr. Musoke Thadeus Agenda, the leader of Kampala City Traders Association (KACITA).
The meeting was also attended by Mr. Issa Ssekito, the Spokesperson of KACITA.