KAMPALA – The Private Sector Foundation Uganda (PSFU) is sounding the alarm on the devastating impact of illicit trade on the country’s economy. Following the Uganda Revenue Authority’s (URA) destruction of 37 tons of illicit cigarettes worth Ush1.6 billion, PSFU is calling for enhanced action against illicit trade, emphasizing its far-reaching consequences.
Illicit trade not only undermines economic stability but also endangers consumers and deprives the country of much-needed tax revenue. The statistics are staggering: the illicit tobacco trade accounts for over 30% of cigarettes sold in Uganda, with three in every ten cigarettes on the market evading tax and flouting tobacco control laws.
“This significant action by URA is very welcome and should now be followed by implementation of robust and sustained enforcement mechanisms against suspects involved in illicit trade,” said Stephen Asiimwe, PSFU Chief Executive Officer. “We cannot afford to let illicit trade continue to undermine our economy and put the lives of our citizens at risk.”
Furthermore, smuggling alone costs the country approximately Ush 985 million in tax revenue daily. The situation is equally dire in other sectors, with two out of three alcoholic drinks sold in Uganda being illicit, resulting in an annual loss of over Ush17 billion in tax revenue.
Asiimwe emphasized that the impact of illicit trade goes beyond just economic losses. “Illicit trade is a deadly plight on our economy, with the private sector bearing the brunt through loss of market share, job opportunities and investments due to unfair competition. Additionally, illicit trade deprives the government of vital revenue for financing public services such as education and infrastructure, and fuels organized crime.”
The PSFU is advocating for a multi-stakeholder approach to combat illicit trade. Asiimwe noted that this approach should include stronger enforcement mechanisms, increased public awareness, and collaboration between government agencies, the private sector, and civil society.
“We urge all stakeholders – government, private sector and the public – to unite against illicit trade. Together, we can foster a business environment where fair trade thrives, and economic development is inclusive,” Asiimwe said.
The call to action comes as Uganda strives to achieve its Vision 2040 agenda, which aims to elevate the country to middle-income status. Defeating illicit trade is seen as crucial to achieving this goal, and the PSFU is committed to supporting government efforts to eliminate this menace.
