The Uganda Revenue Authority (URA) together with the Ministry of trade have today met traders under their different Associations to discuss the way forward on the new taxes that traders in textile have been complaining about. This is one of the efforts aimed at diffusing a planned industrial action called by Kampala City Traders (KACITA) due to start on 1st September 2021.
Last week traders under the Kampala City Traders’ Association KACITA threatened to strike over the duty rate of $3/3.5 per kg for 90% of the textile and garments fabrics that are not manufactured in Uganda.
This is one of the main issues traders are fronting for their strike. However, the URA says, through a ministerial directive, the textiles and garments, which are not manufactured in Uganda, have been maintained at an import duty rate of 35%.
Ian Rumanyika, the Assistant Commissioner of Public and Corporate Affairs at URA said the import duty has been revised after consideration from the government.
“The Traders thought that still, the station is not good, they petitioned the government to have that revised as well. The government has come back with a revision of maintaining 35% but only on the 90% of the imports of the garments and textiles that are being brought in the country because the 90% can not be sourced locally,” he said.
However, the textiles and garments that can be sourced locally from Ugandan manufacturers which account for 10% of the imports by the traders shall be maintained at the rate of 35% as approved by the council of Ministers under the East African Community Gazette.
Rumanyika also says they carried research to find out more about the issues the traders raised and indeed they had a point.
“One of the issues the traders raised is that the current capacity of the factories here does not have the capacity to meet the traders’ needs. So, we were guided that if that is the truth, we go on and research and the truth remains that over 90% of the imports of garments and textile are actually not manufactured here.”
These taxes according to the Acting Assistant Commissioner, Public and Corporate Affairs URA Ian Rumanyika are intended to protect local producers.
The meeting held today at the office of the prime minister between URA, Ministry of Trade and traders’ associations has not yielded much according to the traders but more meetings are scheduled to further discuss the matter.