The titular head of Muslims in Uganda, Prince Kassim Nakibinge has appealed for a constructive dialogue between the Ugandan Revenue Authority (URA) and traders to address taxation issues.
He made this appeal during the Eid luncheon at his residence in Kibuli, where he hosted several dignitaries.
Protests recently erupted among traders in downtown Kampala (Kikuubo), leading to the closure of their shops in opposition to the implementation of the Electronic Fiscal Receipting and Invoicing System (EFRIS). During these demonstrations, the police apprehended two individuals.
Traders argue that the introduction of EFRIS, which includes the use of Electronic Fiscal Devices (EFDs), e-invoicing, and direct communication with business transaction systems, leads to double taxation. They also face challenges in understanding the new automated sales records and levy system.
The proposed taxes on essential products such as fuel and building materials for the upcoming financial year have raised concerns about an increase in the already high cost of living. The government justifies these proposals as necessary to cover a revenue shortfall while planning to reduce borrowing.
The proposed taxes encompass five sets of tax bills: Excise Duty Amendment Bill 2024, Stamp Duty Amendment Bill 2024, Income Tax Bill 2024, Value Added Tax Bill 2024, and Tax Procedures Amendments Bill 2024. They include charges such as Ush500 ($0.12) on each 50kg bag of cement, adhesive, grout, white cement, or lime, Ush1,550 ($0.39) per liter of gasoline, Ush1,230 ($0.31) per liter of gas oil, and Ush1,550 ($0.39) per liter of paraffin.
Moreover, the government proposes new taxes on bottled mineral water, opaque beer, and gains from the sale of land, rental property, and shares of private companies.
These proposals aim to generate Ush1.9 trillion ($488 million) to finance the Ush58.3 trillion ($15 billion) budget for 2024/25, focusing on the monetization of the Ugandan economy through agriculture, industrialization, services expansion, digital transformation, and market access.
Some legislators and tax experts have expressed dissatisfaction with these proposals, highlighting that they disproportionately affect the poor and raise their living costs. They suggest broadening the tax base instead of introducing new taxes.
Nakibinge urged both parties to engage in a constructive dialogue and resolve their differences for the benefit of the nation.
He emphasised that while taxes are crucial for efficient governance, URA should refrain from adopting punitive measures against traders and businesspeople.
“We need taxes to run the country efficiently, but at the same time, URA needs traders to continue collecting taxes. We appeal to URA not to penalize traders and businesspeople,” he stated.
Nakibinge also expressed concerns about political prisoners who have been held in custody for the past three years since the last General Election.
He called on Ugandan authorities to release these individuals, reiterating his plea for their freedom as the country approaches the next General Election in two years’ time.
He further extended warm congratulations to Kabaka Ronald Muwenda Mutebi II on his 69th birthday, expressing gratitude to the Allah for blessing him with a good life.
He also commended the Kabaka for his efforts in mobilizing Ugandans to combat the AIDS epidemic.
As Ramadan draws to a close, Nakibinge took the opportunity to congratulate all Muslims on the occasion of Eid-al-Fitr.