Getting a trading licence from your district
The only rule and the only figure that matter are the ones your own council gives you, so the first step is to walk in and ask. A business trading from a fixed place is usually asked to hold a licence for that place and that trade, and the steps are much the same everywhere: say exactly what you sell and where, let the council assess you, pay through the channel it names, and leave with a receipt and the licence itself. What varies is the fee, the office that handles it and the renewal date, so never work from a figure a trader in another district gives you.
- A licence is normally issued for a place and a trade rather than for a person. Change either one and you talk to the office again.
- Assessment usually turns on what you sell, how big the premises is and where in the district it sits, so two shops on the same road can pay differently.
- Never hand cash to somebody who approaches you outside the office. Pay only where the office tells you to pay and leave with a receipt.
- Keep the licence and the receipt where you trade, not at home, and photograph both.
- Ask your council when its licence year runs and when renewal falls due, then put that date in your own calendar. The queue is always worst in the last week.
General information, not legal advice. Rules and fees differ between districts and they change, so check the current position with your district office before you rely on this.
Do you actually need one for what you are doing?
The rough line is between a fixed place of business and a person selling from a mat, a basin or a bicycle. A lock-up shop, a salon, a tailoring room, a bar, a grain store or a stall you rent by the year is the kind of thing councils licence. Someone selling tomatoes on a market day is usually paying market dues to the market management instead, which is a different payment collected in a different way.
In between there is a lot of grey. A woman baking at home and selling to two shops is often left alone until she takes premises. The moment there is a signboard, a rented room and regular opening hours, expect the question.
The honest answer is that this differs by council, and the person who can tell you is not another trader but the office itself. Going in and asking costs a morning and settles it.
Which office do you go to?
You go to the local government for the place where the business trades. Ask at the council headquarters for whoever handles trading licences, because the office goes by different names in different councils and in a rural sub-county it may be one officer who handles revenue among several other duties.
This matters more than it sounds. A woman in Wakiso whose shop sits in one division and whose home is in another must deal with the division where the shop is. In Kamuli or Koboko it may mean a trip to the town council rather than the sub-county you vote in.
Ask at the office for the name of the officer who handles licences, and write it down. Nearly every problem later is solved faster by asking for a person by name than by starting again at the counter.
What to take with you the first time
Carry your national ID, the exact location of the premises including the plot or the name of the building and the trading centre, your tenancy or rent agreement if you have one, and a clear description of what you will sell. If you have a business name you use on a signboard, take that too.
Take money for the assessment day and take it in a form the office accepts. Ask first how the council wants to be paid, because some do not take cash at the counter and will send you to a bank or to a mobile payment reference. Ask before you queue rather than after.
Take a pen and something to write in. You will be given a reference or a number to quote, and that number is what you will need every time you follow up.
How is the fee decided?
Expect to be banded rather than given one flat national amount. The band usually depends on the kind of trade, the size or value of the stock, and where in the district the premises sits, because a shop on a tarmac road in a busy trading centre is not assessed like the same shop three kilometres out.
That means the figure your neighbour paid is only a guide, and the figure someone paid in another district is not even that. It also means the assessment can be discussed. If the officer has put you in a band that assumes a bigger stock than you hold, ask them to come and look, or explain what you actually sell.
Ask for the fee to be written down with the band named, before you pay. A written assessment is what protects you if a different officer asks for something else in the same year.
What happens on the day you pay?
You will normally be assessed, told the amount, told where to pay, and asked to bring the payment proof back before the licence is issued. Some councils issue on the spot once the payment shows on their system. Others tell you to come back, and it is worth asking exactly which day.
Insist on a receipt in the council's own name and numbering, not a handwritten note. Check that your name, the trade and the location on the licence are correct while you are still standing there. A wrong trade on the licence causes an argument next year.
Photograph the licence and the receipt on your phone and send the pictures to somebody who keeps them for you. Paper on a shop wall fades, gets rained on and gets removed.
Why bother, when the shop next door has no licence?
The first reason is that enforcement is unpredictable rather than absent. It comes in waves, usually after a council starts a revenue drive, and the trader who is closed for a week while it is sorted out loses far more than the fee.
The second reason is that a licence opens doors that stay shut without one. Wholesalers who give a credit account, schools and health centres buying supplies, and anybody running a tender all want to see paperwork. A savings group that wants to buy inputs in bulk under one name often needs a licensed member to front it.
The third is simpler. A woman with a licence and a book of receipts can prove what her business is, which matters the day she wants a loan or has to argue about a landlord, a supplier or a boundary.
How do people lose money in this process?
The commonest loss is paying somebody who offers to sort it out for you. They meet you near the office, take the fee plus something for themselves, and either return with nothing or return with a receipt that is not the council's. You have then paid twice.
The second is paying with no receipt because the queue was long and someone offered to be helpful. Without a receipt in the council's numbering you have no licence and no proof.
The third is going in the last week before a deadline, when the queue is longest and the temptation to use a middleman is greatest. Go early in the cycle, on a weekday morning, and carry a bottle of water and a folding stool, because a morning is a realistic estimate.
How do you renew, move premises or change trade?
Renewal is easier than the first application because you are already in the council's record. Ask when the council's licence year ends, take last year's licence and receipt with you, and put that date in your own calendar rather than waiting for anyone to remind you.
If you move premises, even down the same road, tell the office. The licence attaches to the place. If you change trade, for instance from selling produce to selling paraffin and hardware, tell them as well, because the band changes and a licence for the wrong trade is the same as no licence.
If you close the business, say so rather than disappearing. Councils can carry arrears forward against a name and a place, and a woman who reopens two years later can be asked for the years in between.
This guide describes what generally happens, not what will happen at your facility or your school. Costs, timetables and rules differ between districts and they change. Check anything that matters with your health worker, the head teacher, or your district office. If something here is wrong or out of date, tell us and we will correct it.
Questions people ask
- How much does a trading licence cost?
- There is no single national figure. Councils band businesses by trade, size and location, and each council sets and revises its own rates. Anyone who quotes you one number for the whole country is guessing. Ask the revenue office for the place where you will trade, and ask for it in writing.
- Do I need a licence to sell in the market on market day?
- Market traders usually pay dues collected by the market management rather than holding a trading licence, but the arrangement differs between markets and councils. If you rent a permanent stall rather than paying by the day, ask, because a rented stall is often treated as a fixed place of business.
- Can a savings group hold one licence for all of us?
- A licence is normally issued to a business at a place, so it does not usually cover several separate shops run by different members. Where a group runs a single joint enterprise, one shop or one grinding mill, that enterprise can be licensed. Ask the office how they want a group enterprise named, as this varies.
- Somebody in uniform asked me for money at my stall. Is that the licence?
- Not necessarily, and you should ask what the payment is for and ask for a receipt before paying anything. Councils, market managements and other bodies all collect different charges. If there is no receipt with an official number on it, do not pay, and take the question to the council office yourself.
- What is a TIN and do I need one as well?
- A tax identification number is issued by the revenue authority and is separate from a council trading licence. Whether you need one depends on your turnover and the kind of business, and it is often needed for wholesale accounts and tenders. Ask at a revenue authority office about your own situation rather than assuming.