KAMPALA – Uganda Revenue Authority has defended its enforcement of Electronic Fiscal Reporting and Invoicing Solution (EFRIS) saying its adoption by traders will ensure a level playing field.
In a statement dated Monday, April 8, 2024, URA management said EFRIS enhances record-keeping, streamlines tax filing and refunds, promotes fair taxation and reduces revenue leakages, hence contributing to a more robust tax ecosystem that serves the greater good of society.
Several traders in Kikuubo and other areas in downtown Kampala on Monday did not open their shops in protest against what they describe as unfair taxes imposed by the government as well as growing competition from Chinese businessmen.
Some of the traders who spoke to this website said they are protesting against the unfair tax policy on EFRIS, the digital tax verification method being used by URA, the 18 percent VAT, and allowing foreigners to engage in similar businesses like Ugandans.
The URA has since dismissed some of the issues raised by traders and also denying the alleged concerns on EFRIS.
“While we acknowledge these concerns, it is crucial to recognize the broader context and benefits EFRIS offers to both businesses and the Government. Launched in 2019, EFRIS is a digital platform that facilitates the direct transfer of Value Added Tax (VAT) billing information between businesses and the Uganda Revenue Authority (URA). It is important to note that EFRIS is not an additional tax but a mechanism for real-time monitoring of business transactions, aimed to enhance transparency and efficiency in VAT collection and remittance,” the URA said.
“Despite initial hesitance, the Uganda Revenue Authority (URA) has diligently addressed challenges faced by traders in the Central Business District (CBD), such as the lack of suitable channels and adequate sensitization. The development of accessible applications, such as the EFRIS mobile app and desktop software, coupled with extensive training initiatives, we have equipped over 56,000 taxpayers—predominantly VAT registered—to seamlessly integrate EFRIS into their daily operations. Since August 2023, our tax educators have been actively engaging with traders across the CBD, offering education on EFRIS. To date, we have successfully trained more than 20,000 taxpayers in the CBD, prioritizing those in the bustling Kikuubo area,” the URA added, noting that:
“Furthermore, recent enforcement measures have revealed concerning levels of sales underreporting within the CBD. Where EFRIS compliance is in place, reported sales have surged by over 500%, leading to a proportional increase in tax contributions. This highlights the importance of transitioning towards a more transparent and accountable tax system. While we understand that change can be challenging, it is imperative for businesses to adapt to new technological advancements to ensure a level playing field and contribute towards Uganda’s economic prosperity.”