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That the collectors of Uganda’s taxes are suffocatingly arrogant is not an opinion of mine, but of many businessfolk downtown.
There are many stories of pain and suffering downtown, and one cannot stop to count the number of shops that have been shut down because of both the violence of taxes – and the suffocating arrogance of its collectors.
As one businessman said to me, “you are at the mercy of the tax collector in this country. URA acts as if they own our businesses, and we are simply their workers.”
Not a businessman myself, I only recently learned that URA officials often go downtown and evaluate the taxable value of stalls and shops and bill them on the spot. They do this after every three months on a quarterly.
That a businessperson ought to file their income returns, which means taxed upon. Notice, however, that for these returns, they would be selling the same good for which they paid taxes when the goods were being entered into the country.
A young lady narrates an encounter with a URA tax enforcer that forced her to close her small under-the-stairs stall just three months after opening it. Atim, not real name, had only recently started gambling with her dream when URA’s so-called “enforcement unit” stormed downtown for an operation.
She had just about three dozen of merchandise and surrounded by mostly empty shelves. The URA official told her that she would be paying Shs 700,000, which she protested. She informed her she was just beginning, and this money would close her down.
The official told her she – she was a woman – didn’t care about her stock.
“If you do not want to pay, get out and I will seal it off and you’ll sort yourself with URA officials.”
Three months later, this woman closed her stall, noting she had not opened the shop to make profits for URA. Atim’s story is the smallest, and the mildest. There are stories of a product being taxed beyond its price on the market. These are far too many.
The tax official goes online – they are asking ChatGPT now – checks the price of the original product, uses that value/price to levy a tax on a duplicate – Version II or III of the original.
A businessman tells me a story of angrily asking a URA official whether they knew the price of the product on the market in downtown Kampala, to which they rudely responded, they didn’t care. Why didn’t they care?
What becomes visible is that the tax collector doesn’t understand that their existence entirely depends on the work of the businessperson. The tax collector appears deluded at three levels (a) a belief that they are not only smarter and that they are competing with the businessperson (b) a belief that they are more important that the businessperson and (c) that they are doing businessfolks a favour in allowing them to operate alongside them.
In truth, these taxes and their crippled logics have killed creativity and invention among the Ugandan businessfolk. The claim is that tax collection offers the moneys from which the budget is funded.
But this is a very problematic proposition, which needs entire lectures to make sense of. But I will focus on funding budgets, and the misleading claims around taxation.
GOVERNMENTS DO BUSINESS
Ironically, while the claim is that these taxes are collected to service public goods and services (which is never true because we are drowning in debt), countries don’t grow from collecting taxes.
Public goods and services are never funded from tax collection. In fact, governments elsewhere actually return these monies to their people in cash when they fall on bad times. Government across the world do business or go abroad and steal to fund their public goods and services.
What has happened to Uganda is that Yoweri Museveni and his friends bought into this neoliberal deception and handed over the country to thieves from abroad.
While I wouldn’t expect them to steal anything from abroad ( just the way European countries do), Museveni’s government does not do any business – yet this ought to be their main source of income to fund the budget.
Their telecom company is almost non-existent; their bank is on life support; their airline is wobbly. They don’t have a public transport system from which to earn. They sold a major national bank (UCB) and handed over all our cash cows including coffee gold, and Lake Victoria to foreigners.
Consider elsewhere – in the so-called heartland of capitalism: Governments elsewhere fight blood and tears to protect their businesses. In fact, many young businesses pay no taxes before they reach a particular threshold.
In Germany, for example, before a business registers €20,000 on its books as profit after tax, such a business pays no tax. But see, Germany provides so much for this businessperson including protection from foreign competition, lower interest rates and public infrastructures.
So, if the most developed countries are gentle and supportive to their developing businesspeople, why does the least developed country seek to suck the blood out of young businesses? What logic informs their taxing decisions?
yusufkajura@gmail.com
The author is a political theorist based at Makerere University.
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