New Tax System Sparks Political Tensions in Uganda

Political tensions are escalating in Uganda as businesses across the country protest against the implementation of a new electronic-based tax collection system.

New Tax System Sparks Political Tensions in Uganda
New Tax System Sparks Political Tensions in Uganda

The deployment of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) has led to widespread closures of businesses in Kampala and other cities, with the sit-in expected to continue amid calls for dialogue with President Yoweri Museveni.

Background of the Protest

Businesses have been closed since Tuesday in opposition to the mandatory use of EFRIS, which monitors transactions in real time.

The Uganda Revenue Authority (URA) mandated electronic financial devices and e-invoicing to enhance tax collection efficiency and transaction transparency, imposing fines on non-compliant traders.

Concerns Raised by Businesses

Traders argue that they are already burdened by the 18% value-added tax (VAT) and express concerns about the high turnover requirement for EFRIS deployment.

The requirement of Sh150 million (over $39,000) in annual turnover for EFRIS deployment is seen as prohibitive for many businesses, exacerbating their opposition to the new system.

Response from Authorities

Ibrahim Bbossa, URA’s assistant commissioner, defends EFRIS as a system designed to streamline business transactions rather than impose additional taxes.

Minister of State for Finance, planning, and Economic Development, Amos Lugoloobi, claims that an agreement has been reached between the ministry and businesses to allow them to reopen. However, opposition figures dispute this claim, insisting that the strike will continue until President Museveni intervenes.

Police Presence and Support from Civil Society

Police have been deployed in Kampala to prevent protests amidst the ongoing standoff between businesses and the government.

Trade unions, civil society organizations, and opposition members have expressed solidarity with the protesting traders, amplifying their demands for dialogue with President Museveni.

Outlook and Resolution Efforts

  • The protest is expected to persist until the grievances of the traders are addressed through meaningful dialogue with President Museveni.
  • Efforts to resolve the standoff continue, with opposition politicians like Allan Sebunya dismissing claims of an agreement between the government and businesses, underscoring the need for genuine negotiations.

The standoff over the implementation of EFRIS underscores the growing tensions between businesses and the government in Uganda.

As protests continue and calls for dialogue intensify, the resolution of this dispute remains contingent upon meaningful engagement between traders and President Museveni’s administration to address concerns and find a mutually acceptable solution.



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