Traders seek win-win solution over taxes, EFRIS

In the forefront of the initiative is the Investor’s University, a business consultancy and mentorship institution based in Kampala, whose objective is to provide a platform that cultivates a tax system in which both the taxpayers and the tax collector win.  

At the heart of the established platform is harnessing a win- win position through consensus.

Through regular business dialogue, the Investor’s University chairman board of directors, Mr James Hillary Yiga, says even the current animosity by traders over Electronic Receipting and Invoicing System (EFRIS), including several other tax related concerns can easily be resolved in a round table dialogue rather than the street protest   

“We have been following what has been happening between the traders, government, and URA regarding EFRIS. We have also seen traders rise up in protest, demanding answers to several tax issues,” Mr Yiga told Daily Monitor on the sideline of Traders Business Dialogue held last week in Kampala.  

He continued: “We have seen a lack of agreement by traders pertaining to EFRIS while at the same time we have observed that the government believes this is the way to go. We have also seen traders involved in the textile industry raising concerns over the method of taxation which is in kilograms.

“Tension is evident. The good news is that these are the things that we think are resolvable in a round table dialogue. Through this means it is possible to have all stakeholders agree through consensus and move forward with businesses that matters to us most – creating wealth and developing the economy.

“Already we have assembled industry experts, sector analysts, tax experts, policy makers as well as implementers and all representatives of the business community. All stakeholders will have an equal chance to discuss in detail or express an opinion, and at the end of the day there will be a common agreed position by way of consensus that is beneficial to all.”

According to Mr Yiga, at the end of it all clarity on matters of contention between the traders and the government will not only be made clear but a position on way forward would have been arrived at without any side feeling particularly aggrieved or short-changed.

As a result traders will not have to close their shops on the basis that they haven’t been heard and in return government will not have to lose any taxes” said Mr Yiga, before, adding: “That is why we think platforms bringing all stakeholders together to find a common position is important in solving trade sector issues.”

This move comes at a time when traders' relationship with the tax collector has been unstable following a run-in over enforcement of EFRIS, a tool meant to among other things assess and monitor compliance of Value Added Tax (VAT).

In an interview with spokesperson of Kampala Arcades Advocacy Forum (KAAFO) spokesperson, Mr Muzamiru Kwebiiha Abwooli and the representative of United Acaders Traders Entrepreneurs Association (UATE), Mr Tom Isaac Musumba, both concurred with idea of the frequent dialogue, saying it will enhance tax compliance and relationship between traders, government and URA.   

They also agree that successful compliance is not just about use of “stick” but also deploying of “carrot” implying that threats and punishment instead dished out by the tax prefect and government instead of dialoguing only help to deepen tax non-compliance.

URA spokesperson, Mr Ibrahim Bbosa, said the tax prefect is not only happy to engage in a dialogue, but that is the path they are taking with a view to deepen compliance.

The Traders Business Dialogue whose first meeting happened last week was held in collaboration with the Office of the Minister of Kampala Capital City and Metropolitan Affairs. If it works out as anticipated, this platform can generate the muchneeded consensus, resulting into a win-win situation ahead of a meeting with President Museveni and traders due at the end of this month.

Utility

·EFRIS is mandatory for Value Added Tax (VAT) registered taxpayers, and failure to comply with system regulations could attract penalties. There are also sanctions for every e-invoice that a VAT registered taxpayer does not raise. According to the law, they will be fined Shs6 million irrespective of the amount on the invoice

·Some of the advantages of EFRIS include fast tracking the refund claims for taxpayers, enabling URA to avail taxpayers with prefilled tax returns in future to minimize delays and costs involved in filing tax returns.

·After the May 7 meeting Mr Museveni ordered URA to waive Efris penalties against traders, the Authority implemented the directive which saw over 2000 traders benefiting