The Uganda Manufacturers Association (UMA) has expressed its support for the Electronic Fiscal Receipting and Invoicing System (EFRIS) while also raising concerns about the manner in which it has been implemented by government agencies.
UMA Chairman, Deo Kayemba, acknowledges the importance of EFRIS in ensuring proper tax administration. However, he highlights a significant challenge: many taxpayers lack understanding of the system and the tax regime as a whole. This, he argues, underscores the need for comprehensive sensitization efforts prior to implementation.
EFRIS, a system facilitating the issuance of electronic receipts and invoices in real-time, aims to streamline business transactions and enhance tax compliance. It operates by transmitting transaction details to the tax authority, enabling the generation of e-receipts and e-invoices promptly.
Initially adopted by several East African countries, EFRIS primarily monitors the payment of value-added tax (VAT) and promotes accurate record-keeping within the business community.
However, traders in Kampala and surrounding areas have voiced opposition to EFRIS, citing concerns about double taxation. They argue that the goods they sell have already been taxed at earlier stages of the supply chain.
In response, the Uganda Revenue Authority (URA) refutes these claims, asserting that VAT is levied at each level of the product’s supply chain in accordance with existing laws. Additionally, URA contends that extensive efforts have been made to educate businesses and taxpayers about EFRIS and its significance.
Commissioner General John Musinguzi emphasizes URA’s ongoing engagement with trade associations and taxpayers to address concerns and find solutions. Despite these efforts, UMA Chairman Kayemba asserts that URA should compensate traders who have incurred expenses installing EFRIS equipment.
Moreover, Kayemba proposes a threshold for VAT payment, suggesting that businesses with a capitalization of at least $50,000 should be liable. This recommendation aligns with the amount required for local investors to obtain an investment license.
In addition to EFRIS-related issues, Kayemba highlights concerns about unfair trade practices, particularly regarding manufacturers operating retail outlets for their products. He calls for the effective implementation of the Competition Act 2023 to address such issues.
Addressing the taxation of garments, UMA opposes adjustments to specific duty rates in the textile trade, emphasizing the importance of supporting the local industry. Despite protests from traders, Kayemba maintains that taxation on imported textile products is essential for promoting local investment.
Kayemba concludes by commending the positive impact of tax amendments introduced in 2021, which have spurred increased investment in Uganda’s textile industry. However, he urges continued dialogue and cooperation between authorities and stakeholders to resolve outstanding issues related to EFRIS and taxation.
