Kampala Traders Stand Firm Demanding Dialogue And Dignity

Tensions Rise: Kampala Traders Confront VAT Burden Imposed By Landlords

Posted by: lukwago J in Business February 6, 2025

Kampala Traders leasing shops in over 30 arcades in Kampala find themselves at a crossroads as frustrations mount over landlords, including Drake Lubega, Bosco Muwonge, and Matovu Younga, shifting the VAT tax responsibility onto them.

Recent developments reveal that shop owners are now mandated to pay the 18% VAT alongside their rent payments, facing immediate eviction if they fail to comply, sparking contemplation of potential business closures.

Adding to the turmoil, landlords have issued warnings that any dissent or refusal to adhere to the new VAT policy will result in a ban on future shop rentals within their respective arcades, exacerbating the predicament for traders.

Rent hikes and tenancy agreements

In a separate ordeal, tycoon David Mutebi’s tenants at the Freedom Centre faced compelled rent increases of Shs800k per shop, underscoring the mounting financial burdens thrust upon traders in the bustling city.

Insights from the Uganda Revenue Authority (URA) shed light on the VAT obligations imposed on landlords, necessitating the collection of 18% VAT from tenants based on rental income, further straining the financial landscape for shop owners.

This narrative is not an isolated incident, as traders in Kampala’s arcades have long grappled with escalating expenses and sudden rent escalations, leading to disruptive strikes and interventions, at times, from President Museveni to restore order.

Apart from the VAT burden, traders also contend with additional taxes from government bodies like the URA, including challenges posed by the implementation of the Electronic Fiscal Receipting and Invoice Solution (EFRIS), which previously resulted in widespread business disruptions.

Despite facing adversities and uncertainties, the traders in Kampala have demonstrated resilience in navigating through the complexities of tax regulations and landlord impositions, seeking stability and solace amidst the turbulent business landscape.

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