The Uganda Manufacturers Association (UMA) has called on Parliament to take stronger action against informal businesses, warning that they are undermining formal manufacturers and weakening the country’s tax base.
Appearing before Parliament’s Finance Committee, UMA Board Chairperson Aga Sekalala urged lawmakers to urgently address what he described as growing economic informality.
“This dualistic monster reinforces a compliant formal sector on life support, amid rampant untaxed activity threatening to drag even formal manufacturers into informality if unchecked. Parliament must act decisively now,” Sekalala said.
He argued that formalisation is key to economic stability, warning that failure to act could hurt growth.
“Formalisation is not an option but a lifeline to rescue revenue-starved growth and avert economic collapse,” he added.
Sekalala described the informal sector as a major threat to Uganda’s manufacturing base and government revenue, noting that it contributes a large share of economic activity while remaining largely outside the tax system.
He said the sector accounts for 54.5% of GDP and employs over 70% of the workforce, yet most businesses are not registered for taxes.
According to him, only a small portion of economically active people are captured in the tax net, leaving a gap in compliance and supply chains.
“UMA desires to see more taxpayers brought under the tax radar, with a reduction in informality which undermines legitimate business,” Sekalala said.
He called for sustained engagement and reforms to support Uganda’s development agenda and improve tax compliance across all sectors.
