By Aggrey Baba
There is growing frustration among city traders, especially those in downtown Kampala’s Kikuubo business zone, who now say that Uganda Revenue Authority (URA) taxes are not just harsh, but are destroying lives, wiping out capital, and forcing hundreds out of business.
Over a year since President Museveni reportedly promised to meet them and listen to their tax grievances, the traders say nothing has changed. Instead, they say things have only gotten worse.
The biggest outcry is about how URA computes VAT and income tax, not on profit, but on gross sales and stock. Traders say this method assumes everyone is making money, yet in reality, most are barely surviving.
Some traders have already closed shop after URA allegedly froze their accounts and deducted huge tax bills without considering their expenses or even verifying their purchase records. Others fear they’re next.
It gets worse for traders dealing in both VAT-exempt and taxable goods. Many report being denied VAT inputs on shared costs like rent, electricity, and transport, simply because they sell items like milk or sugar, which are VAT exempt.
According to them, if one sells wine and fresh milk, URA will tax you like you only sell wine. Yet milk is the one that sells faster, and that’s what people buy. So you end up taxed on products that didn’t make you any money.
There is also anger over the 6% withholding tax on every major transaction, especially for traders who handle high volumes but make low margins.
For example, one leaves home in the morning with UGX 70 million to restock, by the time they reach the supplier, they’re left with UGX 66 million because of withholding tax. Before they even open the bales, you’re in loss.
To make matters worse, any business making UGX 500 million a year (which in downtown terms can simply mean 1,500 crates of soda) is required by law to produce audited accounts. But most traders operate informally, relying on trust, manual records, and basic receipts. They say this requirement is completely out of touch with how business actually works in Uganda.
Some who were audited last year say URA denied them any input on their purchases because their suppliers hadn’t issued fiscal receipts, even though VAT had already been paid at the point of import.
As these stories mount, Kikuubo is beginning to sound like a war zone (not of guns, but of economic survival).
Despite repeated cries, no high-level engagement between the traders and State House has taken place. And as the financial pressure builds, many say they are losing hope, and their livelihoods.
