The traders have been vocal in their opposition to the EFRIS, a system introduced by the Uganda Revenue Authority (URA) to enhance tax compliance and reduce revenue leakage. The system mandates businesses to issue electronic receipts and invoices for all transactions, allowing real-time monitoring and reporting of sales data to the tax authorities. Traders argue that the system is burdensome, citing increased operational costs and technical challenges, and have been advocating for its removal or significant modification.
President Museveni’s decision to delay the meeting came as a surprise to many, especially considering the rising tension between the traders and the government over this issue. The President, in a statement, explained that he did not want to engage in discussions with the traders without first receiving comprehensive reports from technocrats.
The postponement has aroused mixed reactions from the business community and the public. Many traders expressed disappointment, having anticipated the meeting as an opportunity to directly convey their grievances to the President and seek immediate relief.
“We have been preparing for this meeting for weeks. It was our chance to speak to the President and make him understand the difficulties we are facing with EFRIS,” said John Kagwa, a spokesperson for the Kampala City Traders Association (KACITA).
KACITA, which represents thousands of traders in Kampala, has been at the forefront of the campaign against EFRIS. The association argues that the system is not only technically demanding but also increases the cost of doing business.
“Most small and medium-sized enterprises do not have the resources to implement and maintain such a sophisticated system. It is driving many traders out of business,” Kagwa added.
On the other hand, government officials and proponents of EFRIS defend its implementation, asserting that it is a critical tool in modernizing Uganda’s tax administration and improving revenue collection. According to the URA, the system has already shown positive results in increasing transparency and reducing tax evasion.
The President’s request for reports from technocrats indicates a cautious approach towards resolving the issue. It suggests that Museveni is keen on balancing the interests of the traders with the government’s objective of enhancing tax compliance. The move is seen by some as a strategic delay to gather more information and possibly find a middle ground that could appease both parties.
Economic analysts have weighed in on the matter, suggesting that the government might consider revising certain aspects of the EFRIS to address the traders' concerns.
“There could be room for negotiation, perhaps through phased implementation or providing support and training to help traders adapt to the system. The government needs to ensure that the system does not stifle business growth,” said Dr. Sarah Kyomugisha, an economist at Makerere University.
The postponed meeting leaves the future of EFRIS in a state of uncertainty. For now, traders continue to operate under the existing regulations, while the government gathers more data and prepares for future discussions. The President has assured the traders that their concerns are being taken seriously and that a new date for the meeting will be announced soon.
In the meantime, the business community remains on edge, eagerly awaiting further communication from the President and hoping for a resolution that will alleviate their operational challenges while supporting the nation’s economic objectives.
