UMA Asks Finance Ministry to Drop EFRIS-Related Penalties against Traders & Manufacturers

The Uganda Manufactures Association (UMA), has asked the government to invest in the equipment used to implement the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) to facilitate its smooth implementation.

Speaking at UMA offices, Deo Kayemba the UMA Board Chairperson, said prior to the introduction of systems like EFRIS, the government should have invested in the equipment needed for implementation.

“Before implementing systems such as DTS and EFRIS, the Government should invest in equipment to facilitate smooth implementation. This would address and reduce the burden of implementation cost on the taxpayers,” he said.

For the past days, some sections of the business community have closed shops and businesses, over alleged unfair enforcement of EFRIS by the Uganda Revenue Authority.

EFRIS is an automated compliance mechanism established by URA to oversee the allocation and centralized tracking of invoices and receipts among specified taxpayers in Uganda. It facilitates real-time transfer of transaction details to URA for e-invoice generation upon transaction execution.

These have outlined a number of issues including high penalties, and the high cost of EFRIS implementation, among others.

Kayemba said some of these can be solved if the government helps provide some of the implementing equipment needed. He noted that a plan on how the money used to acquire the equipment is to be reimbursed can be discussed with the traders.

He further added that there is high handedness on penalty yet the implementation still has some challenges that must be addressed on both sides (the taxpayers and URA)

“Irrespective of the value and turnover of the taxpayer, each invoice attracts UGX 6million,” he noted, adding that as per the Investment Code Act, USD 50,000 is required for a Ugandan investor to acquire an investment license.

He proposed that the VAT threshold be matched to the acquisition of investment threshold for Ugandans.

Kayemba further suggested that with the ongoing consideration of tax bills by Parliament for the Financial year 2024/25, penalties associated with the implementation of EFRIS should be based on the invoice value and as UMA, proposed a penalty of 1% of the invoice value to drive compliance.  

He also asked the Ministry of Finance, Planning and Economic Development to drop EFRIS-related penalties that were issued against all traders and manufacturers, explaining that this will enable the trade and manufacturing sector to start from a new page in the financial year, 2024/25.

He noted that UMA strongly believes in engagement and therefore the matters can be resolved expeditiously through open dialogue with the relevant stakeholders.

He noted that the trade sector should be given up to June 30, 2024, to allow them to run down their stock that may have come in without complying with the new EFRIS.

He explained that UMA supports the introduction of EFRIS as a tax collection solution 100%.

“Manufacturers have already embraced the system and it is working for us as this widens the tax base, formalizes the economy so that all players in the economy can contribute to their tax obligations on a levelled ground, It digitizes the economy which is a critical factor in development. The same system has been adopted regionally and works well; therefore, we cannot work in isolation.”