Kampala City Traders Associations say they will protest against the new tax policy on imported textile fabrics and garments. The traders say they are considering several actions to show displeasure over the textile tax, and also the failure by landlords to waive rent arrears for the period when the country was under a total lockdown.
The association had given the government a two weeks ultimatum to review the policy in which the tax rates of textiles were increased to 35 per cent as import duty from 25 per cent, and to $5 per kilo on the imported textile materials. The government says that the move would encourage import substitution and promote the local industry.
But the traders say that the new policy has placed a heavy burden on them and asked the government to allow them to clear their goods based on the transaction value as opposed to weights. Thaddeus Musoke, the acting chairman of Kampala City Traders Association says that traders have resolved to keep their shops closed effective September 1, 2021, and wear black, in protest of the government’s failure to listen to their outcry.
He added that all engagements with the Uganda Revenue Authority, the Ministry of Finance and the Ministry of Trade yielded no fruit. Musoke faults the Ugandan government for favouring Chinese businessmen at the expense of local investors and traders.
Joseph Mukasa, a textile fabric importer and a leader in the United Attire Trader’s Association says that the traders are hurting and many of them have lost their merchandise because they are unable to pay taxes. “It is unbelievable to tell someone who is just from lockdown that the incentive I am giving you is an increased tax when we cannot even pay rent,” he said.
Apollo Mughinda, the Principal Communications Officer in the Ministry of Finance said that the issues raised by the traders will be addressed in a meeting to be held early next week adding that the government strategy is to support local industries through import substitution.
“We are also aware that some traders are not very honest as per our verification on their imports, this is another issue we are going to have a candid discussion over, some of them are also not declaring rightly and there are some fabrics which in our view are not required to be imported unless we don’t have them here in the country,” he added.
Mugindha said that the Uganda Revenue Authority also has a window that some of the importers can use to get concessions once they are organized. However, he adds, many of them refused to register for the initiatives.
