Address Trader’s Challenges, Manufacturers advise Government

HABARI DAILY I Kampala, Uganda I Manufacturers, under their umbrella – Uganda Manufacturers Association (UMA) have advised the Government to expedite the process of resolving the issues of traders over the taxation, saying it’s damaging the economy.

Government has been in a deadlock with traders over the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), which they say is making them incur huge losses.

“A sizable amount of money is being lost every day due to the current impasse. A solution should be found so that business moves on and the economy is not affected, said Deo Kayemba, UMA’s Chairman. This was during a press conference held at the UMA showground in Lugogo on Friday, to address the impasse.

He said UMA strongly believes in engagement, and urges parties concerned to ensure open dialogue with the relevant parties so that expeditious resolution of the dispute is effected.

He said the traders should be given a moratorium of up to 30th June 2024 to allow them run down their stock that may have come in without complying with the new EFRIS.

“The ministry of Finance should drop EFRIS-related penalties that were issued against all traders and manufacturers. This will enable the trade and manufacturing sector to start from a new page in the financial year, 2024/25,” counselled the UMA boss.

He said there is there is high handedness on penalty yet the implementation still has some challenges that must be addressed on both sides (the taxpayers and URA)

“Irrespective of the value and turnover of the tax payer, URA had insisted that each invoice attracts a penalty of sh6m. This is unrealistic and should be thwarted forthwith,” he said.

He further advised that during the ongoing consideration of tax bills by Parliament for the Financial year 2024/25, penalties associated with the implementation of EFRIS should be based on the invoice value and we propose a penalty of 1% of invoice value to drive compliance.

Kayemba advised the Government to adjust the VAT threshold to make it more accommodative.

“As per the Investment Code Act, $50,000 (sh185m) is required for a Ugandan investor to acquire an investment license. UMA proposes that the VAT threshold be matched and held at the same amount for sanity to prevail,” he said.


Dr. Ezra Muhumuza Rubanda, the UMA executive director said the import duty on fabrics and garments doesn’t fit into the current circumstances.

“UMA does not agree on varying the specific duty rates applicable to some tariff lines of textile. The textile sector has over 500 tariff lines of which only 47 attract specific duties,” he said, adding that the specific duties were introduced after a consultative process based on available local and regional capacity.

“The rationale behind this is to enhance value addition on local cotton where only 10% is value added as of now. Owing to this policy position, investments have been attracted into the textile sector which should not be disrupted by policy reversal,” he said.


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