Five days of business of closure in Kampala and other cities in the country, the Finance Minister Matia Kasaija has informed the country that government is committed to averting the ongoing trader’s strike.
Kasaija made the commitment after a section of lawmakers on the joint committee of Parliament on Trade and finance demanded for an action plan and an assurance such that traders and the general business community could resume their operation.
From the time of this publication at TV10GanoMazima, the entire nation is vehemently waiting to hear from what transpired from the meeting held by President Yoweri Museveni with both the traders and the Uganda Revenue Authority today, the President summoned this meeting to listen to the traders’ grievances in order to address the impasse.
Calling on the seemingly agitated leadership of Kampala City Traders Association and the entire business community to stay calm, Kasaija said that government is much interested in solving the matter in the shortest time possible although there are procedures to follow.
Ronald Afidra Olema, MP Lower Madi county noted that this is a matter of public concern and requires to be handled with the atmost urgency it deserves, since many families and lives are affected.
“I am one of the people that want this matter to be addressed as soon as possible because it affects revenue collections, affects the jobs and the entire economy but we must follow procedures” Kasiaja concluded.
Members of the joint parliamentary committee of Trade and Finance have expressed an urgent need for the ministries of trade and Finance to address the loopholes in the Electronic Fiscal Receipting and Invoicing Solution- EFRIS, a tax administration system.
Handling a petition presented by traders concerning this new tax administration, the committee appreciated the concerns of the traders which ranging from the high costs of installing the EFRIS huge penalties in case of delays for the trader to collect and report the VAT.
The traders also expressed concern to the committee that was attended by URA officials that the VAT rate levied at 18% is so high compared to other countries in the region and therefore suggested to bring down to 16%.
The committee chaired by Mwine Mpaka for Trade and for Finance also learnt from the traders that the threshold for businesses to have the EFRIS system should be operation capital of 150 million shillings which they say is too low.
The traders prayed that the threshold should be put at 1 billion shillings since the 150million as enacted in 1996 for a business entity to qualify for Value Added Tax is no longer relevant.
Muzamiru Kwebiiha Abwooli, the spokesperson for Kampala Arcades Advocacy Forum explains this system have the threshold of 150 million should be revised to 1 billion shillings capital for the business entities to be considered for Value Added Tax (VAT).
“It needs some kind of changes for instance from 1996, 150 million shillings is not all that big money right now as it was then, today there has been some many changes and so money has lost has lost its real value, so 150 million shillings can not be a threshold for VAT and therefore some with capital worth 150 shillings can not be a tax agent, we say it should be revised to a billion shillings”-Abwooli said.
The Shadow Minister for Trade who is also Jinja city woman MP Manjeri Kyebakutika has called for immediate suspension of the Electronic Fiscal Receipting and Invoicing Solution- EFRIS, a tax administration system being protested by the business community.
Kyebakutika said these traders in Kampala, Jinja and other cities who closed their shops demonstrating against the system which they say its enforcement is grossly affecting their business operations.
Commissioner General John Musinguzi together with business community represented by members of the Kampala City Traders Associations.
Kyebakukita says that the Uganda Revenue Authority introduced this Tax administration system with out full sensitization of the traders, adding that the trading can not embrace something they do not fully understand compound other grievances undermining their businesses.
“let’s this system be first of all be suspended so that we can review it as parliament such that we see how best, can our traders adopt to it, EFRIS first of all is a technological innovation that requires some level of technical understanding, people need to be sensitised”-Manjeri said.
Referring to the huge public debt that has affected the national resource envelope, Otuke County MP Paul Omara said Uganda can only finance its budget by 50%-58% due to a huge challenge of raising sufficient domestic revenues to fund the national priorities.
“As a country we have a big challenge of raising domestic revenue to fund our budget other than relying on borrowed money because it has narrowed our fiscal space, we are spending substantial amounts of money just paying dent,21 trillion shillings a substantial amount of money”, He explains
It is against this background that Omara re-echoed the need to widen the tax base to ensure that every Ugandan pays their fair share of tax which will subsequently reduce the tax burden on a few compliant Ugandans.
“Why EFRIS, EFRIS was a supposed to create efficiency and transparency on matters of tax administration and we have invested a lot of money so it is not a bad thing, but I think we shall have to look at the elements of its administration-Omara said.
Omara says whereas the EFRIS system is here to stay and purposely to improve tax compliance and transparency, the traders have genuine concerns which parliament and the relevant ministries should find solutions to.
“We are the ones who passed the law, URA is the implementor just imagine you fail to submit a simple transaction on EFRIS immediately you attract a 6 million penalty, I think it is unfair, it is something we can sit and look at it and see how we can correct it”, Omara observed.
On his part, the Uganda Revenue Authority Commissioner General John Musigunzi noted that whereas some of the complaints can be looked into, the committee should appreciate that the level under declaration of sales by the traders is gross and this is what EFRIS is trying to cure.
“Where URA has successfully rolled out EFRIS with a lot of resistance, it is shocking to establish the level of under-declaration of sales. for some businesses it is as low as 10%, some one makes sales of 10 million shillings a day and he has been declaring to URA only 1 million shillings” Musiguzi said.
Submitting to the lawmakers, Musigunzi wondered, how can we(Ugandans) develop this country when people are determined to be that non-complaint and this is across the sectors, stressing that the level of under-declaration is gross.
