Importers and dealers of used textiles under their umbrella, Uganda Dealers in Used Clothing and Shoes Association have threatened to close their businesses over ”rampant” tax increments on their products by Uganda Revenue Authority (URA).
This follows the latest tax increment introduced in November, which they say has seen increments grow from $0.89 per kilogramme in January 2018 to $1.17 per kilogramme in 2022 translating into an increment of about Shs40million shillings.
Speaking to the media on Sunday, Andrew Rubeihayo, the association chairman said the taxes on their products are unfair compared with the neighbouring countries’.
”On November 5, 2022, we woke up to disheartening news about a tax increment in our business. URA has made it a habit to increase values (CET rates) of used clothes and shoes even when they are not backed up by policy amendments and or the East African Community Management Act,” Rubeihayo said.
According to Rubeihayo, between April 2021 and November 2022, the tax body has increased taxes thrice and the latest increment was instituted without either warning or notice.
He highlighted that between November 2021 and November 2022, tax on used clothes has been increased from $1.13 to $1.17 per kg, used shoes from $1.37 to $1.41 while that of used bags from $2.27 to $2.34 per kg.
He added that despite complaining to URA about the “unfair” tax increments, they have received no help from the tax body.
“We have written to URA and expressed our disappointment not forgetting the hard times that we are going through with increased cost of goods from origin, high freight charges, runaway inflation, a weak shilling over the years and yet URA uses a high forex rate for valuation,” Rubeihayo asserted.
The traders, have therefore, demanded an immediate suspension of the increased rates and call for negotiations with the URA to even further reduce the old rates, to be in line with sister countries’ rates, lest they will close their businesses.
“We are ready to close our shops and not clear any containers until we receive postive feedback from URA and our leaders,” Rubeihayo warned.
