A glimmer of hope emerged for Ugandan businesses after a tense meeting between the Finance Ministry and trader leaders. A temporary halt to the ongoing strike has been called as the government promises consultations on key issues.
Following intense negotiations, both parties reached an agreement. Traders will reopen their businesses while the government holds internal discussions within two weeks. These discussions will centre on proposals for raising the VAT threshold and adjusting VAT rates.
Traders had demanded significant changes, including an increase in the VAT threshold from 150 million shillings to 1 billion shillings and a reduction in the VAT rate from 18% to 16%. This, they believe, would ease the financial burden on smaller businesses.
Import duties were another point of contention. Traders raised concerns about high tariffs, particularly on textiles and garments. Additionally, they highlighted inconsistencies in the way the Uganda Revenue Authority (URA) assigns import values to similar items. They stressed the need for clear and consistent tax regulations on imports.
In response, the government pledged to study and consult on proposed changes to import duties, aiming for a fairer and more uniform tax system.