Economy
Kampala Traders Shut Shops in Protest Over New Textile Tax Regime
Business in Kampala’s Central Business District ground to a halt on Tuesday as hundreds of traders closed their shops in protest against what they describe as punitive new taxes on textiles and garments. The strike, which paralysed activity in major trading hubs such as Kikuubo, Owino Market, and surrounding arcades, underscored growing discontent within the business community following recent changes to import duties.
The new tax regime, which took effect on July 1, introduced weight-based tariffs on imported fabrics and garments. Fabrics now attract $2 per kilogram or 35% of the value (whichever is higher), down from the previous $3 per kilogram. Similarly, the duty on imported garments has been lowered from $3.5 to $2.5 per kilogram or 35%. While government officials had pitched the changes as relief to traders, those in the textile industry argue the formula is deceptive and continues to impose unsustainable financial pressure.
“We’re going through tough times, yet many refuse to acknowledge it. I hold the trade leaders accountable; instead of uniting traders, they’re working to divide and break them apart,” said Hajji Issa Sekitto, Acting Chairperson of Kampala City Traders Association (KACITA).
According to Sekitto, the new tax model disproportionately affects small and medium traders whose businesses rely on importing affordable textiles and ready-made garments from Asia and the Middle East. “The shop closures are a direct response to this structure. We have petitioned Parliament, Cabinet, and even the President, but no meaningful action has been taken,” he added.
The shop closures sent ripple effects across downtown Kampala, where textile imports dominate a significant portion of commercial activity. With businesses shuttered, customers were left stranded, while transporters and clearing agents reported disruptions in their operations. Economists warn that if the standoff persists, Uganda could see a surge in commodity prices, particularly in clothing and fabrics, which remain essential household purchases.
Government’s Position
Authorities have defended the new tax regime as part of broader revenue mobilization efforts and an attempt to create a level playing field between local manufacturers and importers. The Ministry of Finance argues that the weight-based tax curbs undervaluation and tax evasion, which had become rampant under the previous system. However, traders insist the policy was rushed and poorly communicated, leaving them unprepared for its impact.
In anticipation of the strike, police and other law enforcement agencies deployed heavily in key hotspots across the city, including Clock Tower, Mini Price, and Nakivubo Road. Patrols were intensified to deter potential clashes or looting as traders staged sit-down protests. Despite the tense atmosphere, no major incidents of violence were reported by press time.
The strike reflects a deepening standoff between traders and policymakers, raising questions about consultation in tax reforms. Analysts suggest the government risks eroding confidence in its economic management if such measures continue without stakeholder buy-in. For many in the business community, the demonstration was not only about taxes but also about fairness, transparency, and the survival of thousands of small businesses that keep Uganda’s retail economy afloat.
As shops remained closed and negotiations stalled, one message rang clear from the streets of Kampala: the traders are no longer willing to bear the brunt of policies they believe threaten their livelihoods. Whether the government engages in dialogue or holds firm on its tax regime will determine how this impasse unfolds in the days ahead.
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