PSST Ramathan Ggoobi talking to traders at Royal Complex building in Kampala next to him is URA Commissioner General John Musinguzi, and Abby Kaggwa commissioner in charge of customs tax.
By George Bukenya
The business community attacks the Permanent Secretary of the Minister of Finance who also doubles as the Secretary to the Government Treasury (PSST) Ramathan Ggoobi in a meeting convened by their umbrella body KACITA at Royal Complex in Kampala.
Mr. Ggoobi was assigned by President Museveni to meet with the business community and hear their concerns as regards to what they say that heavy taxes are driving them out of business and that fake Chinese investors engage in retailing and hawking.
The importers have been all along crying foul play by the URA purporting that it’s taxing them unfairly something they allege have driven many of their colleagues from business and thus have become jobless. They had resolved to stage a demonstration which they called off after the president promised to meet their leaders at forge an amicable solution.
The most affected are the importers of garments from the different parts of the world whose import duty is charged basing in weight which they oppose saying its regressive in nature and it takes away their capital.
Isa Ssekitto the spokesperson of KACITA who presented the traders grievances against URA said that URA is violating the East African Common External Tariff of charging 35%, that there are 47 items that were removed from such regime and are taxed basing on kilogram because of this Ugandan traders have resorted to avoiding taxes where they pass their imports in countries like Dr. Congo and Tanzania which observe the common external tariff law and they smuggle them to Uganda.
He also revealed that there are manufacturers who purport to be manufacturing goods yet they only manufacture only 10% and import 90% .They deceived while applying for licence that they have the production capacity which they actually don’t have, that this have also pushed many local traders out of business.
On the issue of Chinese fake investors, KACITA mouth piece said that there are Ugandans who are used by Chinese to do trading yet they came as investors who are supposed to invest in Industrial activities but they end up importing after which they start whole selling and retailing.
The outspoken Ssekito also informed the PSST and the Commissioner General that KACITA is ready for the transition from importing to manufacturing but they needed government support to start this.
Semanda a garment dealer in at Nabugabo said that he had a capital base of US dollars of 200,000 and he used to import from China but when URA introduced the assessment of tax on garments in kilograms his capital shrink to less that US dollars 30,000 after carrying out his stock taking.
“I had accumulated a capital base of about US dollars 200,000 and living a happy life as a business man but because of the regressive tax system, my capital dwindled to a mere US dollars 27,000. I can no longer now go to China and other countries for import.” Semanda lamented.
The Director in charge of Economic Policy at Abby Kaggwa URA informed the business community that the tax body introduced the US dollars 3.8 per kilogram of garments imported because they wanted to discourage the importation of such commodity.
“The reason as to why we imposed such tax regime is that we wanted to encourage Industries to embrace value addition on our raw cotton with an aim of reducing on imports so as to save foreign exchange that is scarce.
The PSST Ggoobi gave the business community hope that government is going to review that tax charged basing on weight for garments which has been the most contentious issue among the importers and he will take it to cabinet with all other tax issues that are negatively affecting them.
He said that in one week’s time he will meet the president and present all their grievances and that he will also work on a cabinet paper that will be discussed by cabinet to find everlasting solutions.
”I understand very well that unfair tax regimes cause smuggling like it was the case in the 1970s when the government then imposed 100% on cigarettes something that fueled a lot of smuggling. We can't allow such poor economics to drive us we will definitely find solutions to remove the unfair taxes.” Ggoobi said
The taxing Authority Commissioner General, John Musinguzi conceded to the fact that what KACITA spokesperson Isa Ssekitto said was correct and right and that it’s escalating illegal acts like smuggling and under declaration.
Mr. Musinguzi said that URA has for long been arresting smugglers, confiscating their commodities and prosecuting them but the acts are not stopping, something he said that could partly be fueled by the tax regime that need to be revised to curb the vice.
The traders said that they will wait for the president to see the action he will take and if he remains coy they will also not hesitate to stage a strike were they will close their shops and also stop importing for some time so as to compel government to listen and act.
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