John Musinguzi, Commissioner General of the Uganda Revenue Authority (URA), has defended the enforcement of the Electronic Fiscal Receipting and Invoicing System (EFRIS), stating that Uganda has been losing approximately Shs4 trillion annually in uncollected Value Added Tax.
Musinguzi emphasized that the new system will ensure all VAT taxpayers pay their fair share of taxes.
Musinguzi made these remarks while appearing before the Committee of Commissions, Statutory Authorities, and State Enterprises (COSASE). URA had been summoned to address queries raised in the December 2023 Auditor General’s report.
Musinguzi’s comments were in response to a question posed by Medard Sseggona (Busiro East), who challenged the Commissioner General on why the tax authority caused disruptions in the business community with EFRIS. Sseggona mentioned the standoff between President Museveni and traders at Kololo, which he said caused embarrassment for Uganda.
Sseggona stated, “I know you have been grappling with the issue of the Electronic Fiscal Receipting and Invoicing System (EFRIS) and you know how far it has stretched us, including attracting a major standoff between URA and our major collection points, the traders.”
“Would you like to use the platform of Parliament to tell us what EFRIS stands for and why it has become controversial lately? Why couldn’t this matter be resolved without escalating into a strike and involving the Head of State, resulting in a public standoff with the traders that embarrassed the nation? Is it work methods, is it a misconception, or is it sheer reluctance to pay taxes?” added Sseggona.
The Commissioner General attributed the standoff between traders and URA to the severe penalties provided for in the law enforcing EFRIS, which he acknowledged were high. However, he noted that these penalties have since been waived, and URA has embarked on an education and sensitization campaign for traders across the country. He added that EFRIS is already in use by manufacturers and corporate companies and that this campaign would extend to traders.
“The penalties for enforcement were quite high, so irrespective of what you were trying to sell without the E-receipt, the penalty was Shs6 million. So, I think the severity of the penalties and the enforcement campaign caused this issue. However, following meetings and guidance, we stopped issuing penalties and returned to engagement and more sensitization. This has been our approach for the last month; we have halted enforcement operations, focused on education, and waived the penalties issued to new users who hadn’t easily understood EFRIS,” said Musinguzi.
According to URA, the standoff between the government and traders is not unique to Uganda, as similar opposition to EFRIS was observed in Tanzania and Rwanda. Musinguzi revealed that once traders adopt EFRIS, the system will be extended to all VAT taxpayers in Uganda.
“We have also examined the trends in countries that have adopted this technology, especially within our environment—the East African Community. Tanzania has used this technology for over 19 years, Rwanda for more than 10 years. Even in Kenya, there was initial resistance, business closures, and standoffs. However, as we explain and engage, people understand that this system is beneficial for them and for the Government,” added Musinguzi.
Comments are closed.