Kampala Traders and the EFRIS Tax Row:

In the bustling streets of Kampala, a significant tax row has emerged, capturing the attention of traders, policymakers, and the public alike. At the heart of the dispute is the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), a system introduced by the Uganda Revenue Authority (URA) to modernize tax collection and compliance.

What is EFRIS

EFRIS is a digital tax administration system designed to manage the issuance of electronic receipts and invoices in real-time. It involves the use of Electronic Fiscal Devices (EFDs), e-Invoicing, or direct communication with business transaction systems, aligning with the Tax Procedures Code Act 2014. The system aims to enhance transparency, reduce tax evasion, and streamline the tax collection process.

The Genesis of EFRIS

Uganda adopted EFRIS in 2019, following a global trend towards digitizing tax systems. Initially, the focus was on orienting URA staff, with a broader rollout planned for 2020. However, the COVID-19 pandemic and subsequent economic disruptions delayed its full implementation.

Current Developments

As of April 2024, Kampala traders have declared a strike over the EFRIS system, citing several concerns. The Federation of Uganda Traders Association (FUTA) and the Kampala Capital City Traders Association (KACITA) have voiced objections, including issues of unfair competition, double taxation, aggressive enforcement of tax compliance, and challenges in enrolling businesses on the automated system.

The Core Issues

Traders argue that EFRIS creates an uneven playing field, particularly when foreign investors with manufacturing capabilities also run retail outlets. They also claim that the URA’s enforcement methods are overly harsh and that the system has led to instances of double taxation. Moreover, there is a perceived lack of support for businesses outside central Kampala to integrate into the EFRIS framework.

The Way Forward

The situation calls for a balanced approach. While the URA’s efforts to improve tax administration are commendable, it is crucial to address the traders’ concerns through constructive dialogue. The goal should be to create a fair and conducive business environment that supports both tax compliance and economic growth.

Conclusion

The EFRIS tax row is more than a dispute over a digital system; it is a reflection of the broader challenges in aligning tax policy with the realities of traders. As discussions continue, it is hoped that a resolution can be reached that respects the needs of Uganda’s business community while upholding the principles of fair taxation and transparency.