By Julius Mugaga Tukacungurwa/Umoja Standard.
Kampala, Uganda: On Sunday, Importers in the used items sector are up in arms against Uganda Revenue Authority’s rampant tax increases on their products. These say, increment in taxes amidst a recession erodes their profits.
Speaking at a Press conference, Andrew Rubeihayo, The Uganda Dealers in Used Clothing and Shoes Association chairman revealed that “On November 5th, 2022 the fraternity woke up to disheartening news about a tax increment in their business.
(L-R) Rubeihayo Andrew-Chairman ‘The Uganda Dealers in Used Clothing and Shoes Association, Keren Zimula-Joint Secretary, Dave Rwamfizi-Secretary General speak to media. Photo by Julius Mugaga Tukacungurwa.
He stressed that Uganda Revenue Authority (URA) has made it a habit to increase values (CET rates) of used clothes and shoes even when they are not backed up by policy amendments and or the East African Community Management Act.
He indicated the increments have grown from $0.89 per Kilogramme in January 2018 to $1.17 per Kilogramme in 2022 translating into an increment of about UGX.40million shillings.
“Between April 2021 and November 2022, the tax body has increased taxes thrice and the latest increment was instituted without either warning or notice”. He stated.
ITEM PREVIOUS $ per kg NEW $ per kg
Used clothes 1.13 1.17
Used shoes 1.37 1.41
Used bags 2.27 2.34
He mentioned that there was an increase of $0.04 per kilo resulting into roughly UGX4-5m per container on top of what the traders were already struggling to pay. ‘This increment in tax, landing in the midst of a global recession where most governments are protecting their traders, is disappointing’.
“We have written to URA and expressed our disappointment not forgetting the hard times that we are going through with increased cost of goods from origin, high freight charges, runaway inflation, a weak shilling over the years and yet URA uses a high forex rate for valuation,” said Mr Rubeihayo.
He informed that the sector employs over 1.5 million people both directly and indirectly, contributing to a huge percentage of the much-needed income to the government.
“The huge disparity in taxation with our neighbours has led to revenue loss to government as some unscrupulous traders opt to smuggle in clothes from the neighbouring countries or migrate to trade in those countries because they have fair taxation rates”. Rubeihayo highlighted.
This shows such disparities.
KENYA 0.93 5OM
TANZANIA 1.1 68M
UGANDA 1.13 104M
It is against this background that the traders therefore demanded for an immediate suspension of the increased rates and call for negotiations with the tax man to even further reduce the old rates.
The Uganda Dealers in Used Clothing and Shoes Association is an umbrella body that unites all those dealing in used textiles, shoes and belts in the country.