Fresh from a devastating flood that washed away their fortunes last week, a section of Kampala City traders yesterday closed shops as they commenced a sit-down strike, protesting various unresolved issues. The traders under their umbrella Kampala City Traders Association (KACITA), are protesting unfair Value Added Tax (VAT), coercive enforcement of the Electronic Fiscal Receipting and Invoicing System (EFRIS) by the Uganda Revenue Authority (URA), and the $3 (Shs10,695) and $3.5 (12476) per kilo import tax on fabrics and garments.
They are also challenging the non-refunding of the 6 percent Withholding Tax, Chinese investors running retail shops and vending merchandise, and the charging of rent in dollars by some landlords. The protest comes two months after the traders called off a similar strike in August over the same concerns after a meeting between KACITA leaders and Prime Minister Robinah Nabbanja.
Government responds
But the State Minister for Kampala Capital City and Metropolitan Affairs, Mr Kyofatogabye Kabuye, yesterday criticised the traders’ action as unfair, saying the government had held several meetings with the traders and had an agreed position.
‘The government has been engaging those people. They first started with the KCCA executive director, then the prime minister, and a position was taken. Because most of the things which were in our power as Kampala were rent, and we agreed no landlord would increase rent,’ he said. He said his ministry is engaging other line ministries of Trade, and Finance, Planning and Economic Development to solve the issues raised by traders.
‘Most of the issues are not directly related to us, they fall under the ministries of Trade, Finance and URA. In fact, we are just shock absorbers of problems and facilitators without final decisions because the decision lies with the line ministries,’ Mr Kyofatogabye said.
Mr Jim Muganga, the spokesperson of the Finance ministry, said the government has demonstrated commitment to engaging the traders continuously. ‘We will continue engaging them through mechanisms they have used in the past to address their concerns. A strike is an escalation that may not necessarily solve the problem,’ he said. Last month, when the traders announced they would close their shops starting in the first week of November, Kampala and Metropolitan Affairs minister Minsa Kabanda, appealed to them to abandon plans for the strike.
‘The Ministry of Trade and other responsible government agencies are handling their issues. I request the traders to continue doing business as their concerns are being addressed,’ Ms Kabanda said on October 22.
Traders cite feet dragging
KACITA Chairperson Isa Sekitto said the most contentious issues raised during the discussions with the prime minister have since not been resolved despite the pledge to resolve the issues within two months. ‘When we closed back then, the prime minister gave us two months to come up with a solution, but it’s nearly three months, and the recent discussions with the government haven’t yielded any results,’ Mr Ssekitto said.
In the new protests, the traders also call for the removal of street vendors and containment of the growing competition from petty foreign traders. ‘Foreigners, especially Chinese, are the manufacturers, the wholesalers, the retailers, and vendors. You find them across the entire country trading chain.
They distribute goods without paying rent and sell an item at Shs10, 000 and goes and vends it to the final person at the same price. There is no chain of trade and this cannot be found in any sober country,’ Mr Ssekitto said.
‘Why is KCCA sleeping, the executive director gave the prime minister a week when we met, why do we have laws that are not implemented?’ Mr Ssekitto warned that the protest will only be called off upon governments’ commitment to addressing their grievances. The chairperson of Federation of Uganda Traders Association, Mr John Kabanda, said the traders are also protesting the insistence by their landlords on charging rent in dollars despite earlier government ban.
‘Downtown, we had agreed that nobody should pay rent in dollars and no one should increase rent by more than 10 percent, but all these issues are not being addressed. The only option we have is to close the businesses,’ he said. Traders argue that the current tax system, including tax by weight for textiles and garments, is unfair and was introduced without enough sensitisation. With heavy security personnel deployed in the city centre, some traders have expressed frustration, citing losses and disruptions to their businesses.
Mixed reactions
But a section of traders yesterday insisted they will remain open, citing pressing financial obligations such as bank loans and high non-waived rent. ‘When we close, some of our counterparts open quietly and make sales. At the end of the month, landlords and banks do not want to hear excuses. So what do you do? You open,’ Mr Frank Luzze, a trader on Datsun Street, said. ‘Most businesses rely on November and December to make the bulk of their annual earnings. The thought of missing this peak period is unthinkable,’ he added. Several traders shared similar experiences, particularly regarding financial institutions. Many said they have taken loans to restock for the festive season, and their repayment schedules remain rigid despite the disruptions caused by floods and the strike.
‘When the banks are demanding their loans, they do not ask whether there was a strike. They only want their instalment. Once you delay, they start calling and threatening to seize your securities. So you have no choice,’ Ms Rachel Namusoke, a textile trader, said. But Mr Ssekitto regretted that some people were taking advantage of the traders’ situation. ‘Some people are seeking selfish interests from traders’ situations, but we’re not forcing anyone. You saw how merchandise and other things got destroyed by floods. And as you reluctantly sit, it will soon come to you,’ he warned.