What is EFRIS? The system that has caused a standoff between URA and Traders

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For the past week, traders, led by various umbrella bodies including the Kampala City Traders Association (KACITA), have been protesting against the enforcement of the Electronic Fiscal Receipting and Invoicing Solutions (EFRIS) system by the Uganda Revenue Authority (URA).

URA confirms that EFRIS is not a tax but rather a system that involves the use of Electronic Fiscal Devices (EFDs), e-Invoicing, or direct communication with business transaction systems to manage the issuance of e-receipts and e-invoices in line with Tax Procedures. The tax body states that the system intends to enhance compliance and efficiency for e-Invoicing and VAT reporting of commercial transactions.

According to the mandate, all VAT-registered taxpayers are required to use EFRIS to issue e-invoices or e-receipts for every business transaction.

Despite the system being launched in 2019, URA states that they initially implemented it with manufacturers, major suppliers, and supermarkets. However, since August 2023, they have reportedly dispatched tax educators to engage with traders across the Central Business District (CBD), providing education on EFRIS. To date, the tax body asserts that they have successfully trained over 20,000 taxpayers in the CBD, prioritizing those in the bustling Kikuubo area.

However, traders have expressed concerns about what they perceive as double taxation and have criticized the lack of sufficient information regarding the operation and objectives of the EFRIS system.

Traders also argue that the EFRIS system incurs high implementation costs as it requires the use of modern technological tools such as computers or smartphones, additional equipment for printing receipts, and the hiring of a designated individual to manage it, all of which impose additional costs.

“Our traders were complying but we realized that business becomes impossible because of high rates. In Kenya, the taxes are at 25%, unlike the 35% charged in Uganda, making our neighbours more competitive,” said Thadeus Musoke Nagenda, the Chairperson of KACITA.

They advocate for the system to be implemented only for manufacturers and major suppliers, rather than small businesses.

President Yoweri Museveni is expected to meet with leaders of the striking traders this week to explore ways of resolving their objections, as the strike has taken a firm stand and is spreading across the country.

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