This would be a protest against the new tax policy on imported textile materials and clothing, according to Kampala City Traders Associations. The shopkeepers said they’re planning a number of activities to express their discontent with the textile tax, as well as landlords’ refusal to waive rent arrears during the country’s entire lockdown.
The group had given the government a two-week deadline to examine the policy, which hiked the tax rates on textiles from 25% to 35% as an import charge, and from $5 per kilo on imported textile materials. The administration claims that the move will benefit local manufacturing and stimulate import substitution.
The traders, on the other hand, claim that the new policy has imposed a significant burden on them, and have petitioned the government to allow them to clear their goods based on transaction value rather than weights. According to Thaddeus Musoke, the acting chairman of the Kampala City Traders Association, traders have decided to close their stores and wear black starting September 1, 2021, in protest of the government’s unwillingness to listen to their complaints.
He went on to say that he had no success with the Uganda Revenue Authority, the Ministry of Finance, or the Ministry of Trade. Musoke accuses Uganda’s government of favoring Chinese investors and traders at the expense of local traders and investors.
The traders are hurting, according to Joseph Mukasa, a textile fabric importer and a leader in the United Attire Traders Association, and many of them have lost merchandise due to their inability to pay taxes. “It’s absurd to tell someone who is just getting out of lockdown that the incentive I’m offering you is a higher tax when we can’t even pay our rent,” he added.
The points mentioned by the traders would be addressed in a meeting scheduled for early next week, according to Apollo Mughinda, the Ministry of Finance’s Principal Communications Officer, who also stated that the government’s objective is to encourage local companies through import substitution.
“We are also aware that some traders are not very honest when it comes to our verification on their imports; this is another issue we will have a candid discussion about; some of them are also not declaring correctly, and there are some fabrics that, in our opinion, do not need to be imported unless we do not have them here in the country,” he added.
Mugindha added that the Uganda Revenue Authority provides a portal through which some importers can obtain incentives once they have structured their businesses. Many of them, he continues, declined to register for the projects.