The ongoing strike by a section of traders against the Uganda Revenue Authority’s Electronic Fiscal Receipting and Invoicing Solution (EFRIS) has sparked debates and calls for the system to be either temporarily paused or completely removed. However, John R. Musinguzi, the Commissioner General of URA, presented a different perspective during his appearance before the Parliamentary Committees on Finance and Trade.
Musinguzi firmly disagreed with the calls to pause or remove the EFRIS system, emphasizing that doing so would lead to inequity in tax payment. He highlighted the importance of having a system that can provide accurate data to ensure fair taxation for all individuals and businesses. Without such a system, Musinguzi argued, relying on assumptions could lead to misleading results.
The implementation of EFRIS, Musinguzi explained, is crucial for ensuring equity in tax collection, particularly Value Added Tax (VAT), and enhancing transparency in revenue generation. He projected that the full implementation of EFRIS could potentially double the total VAT collections from Ugx. 3.5 trillion to approximately Ugx. 7 trillion.
Addressing concerns about selective implementation, Musinguzi warned against the potential inequality in the business landscape if EFRIS is only applied to certain sectors such as manufacturers, suppliers, and supermarkets. He cautioned that this could lead to unfair advantages for some businesses and adversely affect others, particularly supermarkets, which might lose customers due to inconsistent VAT charges.
While acknowledging operational challenges with the EFRIS system, Musinguzi assured that ongoing monitoring and improvements are in place to address these issues. He emphasized that technological solutions often encounter initial difficulties but gradually improve with feedback and implementation experience.
Encouraging the adoption of technology, Musinguzi stressed its importance as a driver of development and urged Uganda to catch up with technological advancements. He highlighted Uganda’s position as a late adopter of fiscal receipting technology compared to neighboring countries like Tanzania and Rwanda, which have been utilizing similar systems for over a decade.
The implementation of EFRIS by URA since 2021 aims to tackle tax administration challenges related to business transactions and receipt issuance. The system facilitates accurate tax assessment and authentic record-keeping, benefiting both URA and businesses in Uganda.
In response to the concerns raised by traders, Matia Kasaija, the Minister of Finance, Planning, and Economic Development, urged for calmness, assuring them of a solution in the near future.
