Ugandan business leaders have warned that the nation's tax and regulatory systems are discouraging formal enterprise. Representatives from the Kampala City Traders Association, or KACITA, stated that aggressive tax collection and complex rules make operating informally more financially viable than compliance. The acting KACITA chairperson, Isa Sekito, reported that traders feel penalized for registering with the Uganda Revenue Authority.
Government officials acknowledged these challenges during a policy dialogue. A finance ministry commissioner noted that high permit fees, duplicated licenses, and rigid requirements create a disproportionate burden for small businesses. He explained that small traders often perceive the costs of formalization as exceeding its benefits.
In response, a state minister pledged stronger government coordination to address the issue. She announced plans for a multi-stakeholder task force to develop a regulatory reform roadmap. The government intends to escalate this matter to the cabinet, recognizing that expanding the formal sector is essential for national economic growth.
Government officials acknowledged these challenges during a policy dialogue. A finance ministry commissioner noted that high permit fees, duplicated licenses, and rigid requirements create a disproportionate burden for small businesses. He explained that small traders often perceive the costs of formalization as exceeding its benefits.
In response, a state minister pledged stronger government coordination to address the issue. She announced plans for a multi-stakeholder task force to develop a regulatory reform roadmap. The government intends to escalate this matter to the cabinet, recognizing that expanding the formal sector is essential for national economic growth.
