KAMPALA – Traders across the country have entered day two of their ‘shop close strike’ over the enforcement of Electronic Fiscal Receipting and Invoicing Solution (EFRIS) by the national tax collector, Uganda Revenue Authority (URA).
According to their umbrella bodies, led by Kampala City Traders Association (Kacita), they will not open unless the President intervenes to their concerns of “over-taxation”.
Following this, the Minister of Finance, Matia Kasaija together with his Trade counterpart on Tuesday held a meeting with representatives of the traders to discuss and resolve the matter.
The traders requested the Government to consider increasing the VAT threshold from Shs150 million to Shs1 billion and a reduction of the VAT rate from 18% to 16%.
They want EFRIS scrapped off – noting that it imposes a high cost of compliance; most traders don’t understand the system; and that it applies to all traders irrespective of whether they are VAT registered or not.
Also, traders argued that the import duty of USD3 and USD3.5 per KG or 35% whichever is higher for textile fabrics and garments respectively is very high.
They noted that URA gives different values to different importers and at different times, for the same imported items. They noted the need for certainty and uniformity about the tax liability on imports. They further recommended that URA should, as much as possible, use valuation methods consistent with the WTO customs valuation and in special circumstances where values cannot be determined, URA should provide value guidelines on an annual basis.
They also argued that some manufacturers, notably foreign investors, are participating in distribution, wholesale, retail, and hawking of their products which results in under-cutting prices and thus low sales
for the Ugandan traders, which goes against the principles of fair competition.
In his response, Kasaija noted that his ministry shall, within the next two weeks, study and consult on the proposal to increase the current VAT threshold and the VAT rates, and communicate the Ministry’s position on the matter, taking into account the findings from the study and relevant consultations.
He, however, gave URA a go-ahead to continue implementing the EFRIS but put emphasis on sensitization and handholding of taxpayers to appreciate the EFRIS and also ensuring that it is demystified among all taxpayers.
To that end, URA shall:
“With immediate effect establish an office in Kikuubo that is solely dedicated to providing EFRIS support services to all traders and other taxpayers,” he said.
He also ordered Commissioner General URA to submit the list of traders currently having outstanding EFRIS penalties, for his consideration for possible waiver.
