The Uganda Revenue Authority (URA) has announced plans to establish an office in downtown Kampala, commonly known as Kikuubo, dedicated solely to providing Electronic Fiscal Receipt and Invoicing Services (EFRIS) to traders and taxpayers.
This decision, made in collaboration with the Ministries of Finance and Trade, follows consultations with traders aimed at resolving an ongoing strike that began on April 8, 2024.
The traders had been protesting the enforcement of the EFRIS system, citing a lack of awareness and infrastructure to use the system effectively. In response, the government has committed to increasing sensitization efforts and providing support to help traders adapt to the new system.
During a statement to Parliament on April 18, 2024, Minister of State for Finance (Planning) Hon. Amos Lugoloobi emphasized that while URA will continue implementing the EFRIS system, it will do so with a greater emphasis on sensitization and support for taxpayers.
“To that end, URA shall exercise more sensitivity in the enforcement of EFRIS and shall accordingly exercise restraint with regard to issuance and enforcement of penalties for non-compliance to EFRIS so as to give all tax payers time to appreciate the EFRIS system,” he said.
Penalties for non-compliance will be applied with restraint to allow time for taxpayers to familiarize themselves with the system. Additionally, the Minister announced that the URA Commissioner General will submit a list of traders with outstanding EFRIS penalties for possible waiver consideration in accordance with the law.
In response to trader requests, the Ministry of Finance will consult within two weeks regarding potential increases to the Value Added Tax (VAT) threshold and reductions in the VAT rate. Traders have also been invited to provide their input on these matters.
“It was agreed that traders shall immediately resume normal business as government concludes internal consultations and further engagement with the leadership of the traders. The consultations shall be concluded within two weeks,” said Lugoloobi.
The Minister acknowledged that resolutions may change following a scheduled meeting between traders and President Museveni on April 19, 2024.
In addressing broader concerns about business sustainability, Minister of State for Industry Hon. David Bahati stated that the government will consider capitalizing the Uganda Development Bank to mitigate the impact of high interest rates charged by money lenders.
Meanwhile, Speaker Anita Among challenged the Ministry of Finance to simplify tax payments to improve compliance, emphasizing the importance of trust in government.
“You do not have to brutalise people to collect money. Trust in the government will be lost and yet at the same time we expect to collect this money from these people. Some people do not even know what they are paying for and the taxes they are paying,” Among said.
However, Leader of the Opposition Joel Ssenyonyi called for a halt to the EFRIS system, citing a lack of understanding among traders and concerns about double taxation. He proposed suspending EFRIS temporarily to allow for further engagement with traders.
“What is so hard about government suspending it for even a month? There is nothing you lose as a government so that you can engage with traders. We can put EFRIS on halt because they are finding the implementation problematic,” he said.
Other legislators, such as Hon. Abed Bwanika and Hon. Jonathan Odur, called for nationwide sensitization efforts on EFRIS and suggested reviewing the Tax Procedures Code to address concerns about penalties and regulations related to the system.
These developments reflect ongoing efforts to address the concerns of traders and ensure smooth implementation of the EFRIS system while also considering broader issues related to taxation and business sustainability.
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