By Frank Kamuntu
HE. Yoweri Kaguta Museveni has cleared the Uganda Revenue Authority (URA) to go on using the EFRIS system to collect taxes from Ugandan traders.
According to URA, Fiscal Receipting and Invoicing Solution (EFRIS) is an initiative under the Domestic Revenue Mobilization Program whose aim is to address the tax administration challenges relating to business transactions and issuance of receipts.
Museveni who was addressing thousands of traders’ gathering at Kololo ceremonial ground, said after listening to traders, tax officials, key stakeholders and experts he didn’t get any serious effect of EFRIS.
”After studying this system, I didn’t see any problem. The other day they brought that EFRIS machine and I tried using it and I saw it was fine. Maybe what URA should do is to let people use their phones, don’t force that machine on people, traders you can use that system on your smartphones,” Museveni ‘ruled’.
According to the President, the policy of the government on taxes is quite deliberate and they normally don’t tax what “builds Uganda” and if they do, they impose a smaller tax.
“When we came from the bush, there was a tax on export in coffee, it was called coffee export tax, we abolished that tax. There’s no tax on the export of coffee or any other product which is sold outside and yet when NRM came into government, that was the main source of tax of the government. Show me just one tax on a product from Uganda. So there is no tax on exports in Uganda. There’s no tax on individuals (Head tax), we abolished that,” he said.
“When I buy matooke from Mbarara or any other part of the country, the only thing I need is a licence and we are having battles in Kampala here with people who have many tax imposes. The view of the government is that apart from licences, internal trade produce should not be taxed. I was having battles with the local governments on the tax imposed on gonja traders in Lukaya and all those who have been doing internal trade, we have been fighting them. There’s no import tax on products brought from the factory within Uganda and trading within the country. And actually when I was preparing to come here, I spoke with one of our young people.”
President Museveni also informed the traders that the import tax is only for those who import goods to Uganda.
He further advised the traders that if they want to fully benefit from the business, they should make the right enterprise selection of engaging themselves in local manufacturing and exportation.
“Traders are of different types. There are those traders who buy our locally made products, traders who sell our products outside, and traders like you who import products to Uganda. So when we are discussing, we should be clear. Therefore, the internal traders, distributors and exporters either don’t pay taxes or pay smaller taxes. Exporters don’t even pay at all,” he said.
“But even for those who import, the taxation depends on what you import. If you import machinery for factories, you don’t pay any tax. If you import raw materials, you don’t pay tax. There’s what we call intermediate products, there you pay the East African tax of 10 percent. If you import pharmaceuticals, initially you don’t pay taxes but in future when we start making our own drugs, we shall have to protect our pharmaceuticals by imposing taxes on the imported ones. Therefore, the issue which is on the table is import of consumer goods which are not medicine, machinery, raw materials and which are not intermediate products. This is what we are talking about. And our taxation on those products is deliberate. It is these people [officials] who don’t explain to you clearly and guide you. That is why I’m very happy to be here to discuss with you.”
President Museveni explained that it has been more than 60 years since African countries got independence but many of them are still backward up to today and one of the problems is importation without limit (endlessly).
“The shirt I’m putting on is made in Uganda and when I put it on, 100 percent of that money remains here in Uganda and this also creates six levels of jobs. Now you who creates this type of shirt from China, if it costs 5 USD here, the only value you add is clearing and forwarding. If you put all that in money terms, you may find it’s like 10 percent. 90 percent of the value went out and the jobs went out. Uganda consumes 276 million metres of textile. A factory like Nytil makes 25 million metres so in order to cover us properly, we need 11 factories like Nytil which employs over 1500 people in the factory alone,” he stressed.
“Uganda is spending 880 million USD on importing textile. That means all the money (900 million USD) is spent on importing textile. That is why we say how long shall we go on with this haemorrhage? That is why we say, we tax in order to encourage our people to buy our Ugandan products so that we close off the importation and if we are to import, we import very important things like the airplanes which we cannot make here. This is the main point, yes, we are looking for taxes and we are looking for taxes from areas mainly “sucking blood from us” and the ones which give us blood, we either don’t tax or tax a little.”
Museveni concluded saying that he will meet again traders’ leaders and tax collectors and thereafter will meet again the traders in June at Kololo.
Watch Full Address Below; Credit UBC.
