Traders clash with URA over EFRIS system

Some traders lack the digital skills to navigate the new system

Kampala, Uganda | THE INDEPENDENT | Kampala’s Kikuubo trading hub was markedly quiet most of last week, a significant deviation from its usual bustling activity. The once vibrant shops, known for their colourful fabrics, utensils and scholastics were closed, with owners absent and signs of protest evident.

Some shopfronts bore signs explaining their closure creating a tense atmosphere starkly contrasting with the area’s typical vibrancy.

This commercial artery of the city experienced a palpable standstill as many small and medium-sized business owners shuttered their doors in response to the newly implemented tax regulations under the Electronic Fiscal Receipting and Invoicing Solution (EFRIS).

Launched in 2021, EFRIS requires the use of Electronic Fiscal Devices (EFDs), e-invoicing, or direct communication with business transaction systems, designed to streamline tax collection and enhance transaction transparency directly to Uganda Revenue Authority (URA).

The system, initially targeted at manufacturers and later expanded to include supermarkets and larger businesses, was engineered to curb tax evasion by improving the accuracy of recorded transactions and ensuring the matching of input and output tax, thus enhancing the country’s tax-to-GDP ratio.

However, The Independent’s investigation reveals deeper grievances fueling the protests beyond the initial discontent with EFRIS.

Besides a deficit in digital skills necessary for operating the EFRIS system, many traders are not fully aware of the system’s significance, the specific businesses required to enrol, the variety of taxes due, and the potential opportunities that lie ahead.

Furthermore, a section of traders have been underreporting taxes, and with EFRIS, a true picture of their expenses has come to the fore threatening their business operations and profitability.