EFRIS Was Rushed By URA – UMA

Uganda Manufacturers Association (UMA) has hit out Uganda Revenue Authority for rushing to roll out the Electronic Fiscal Receipting and Invoicing System (EFRIS) without doing enough sensitization.

Manufacturer body also says it would have in order for government to invest in the EFRIS before rolling it out.

Mr Deo J.B Kayemba, the Chairperson at UMA observed thatUMA supports the introduction of EFRIS as a tax collection solution 100 percent; manufacturers have already embraced the system and it is working for us.

“It widens the tax base, it formalizes the economy so that all players in the economy can contribute to their tax obligations on a leveled ground,” he said.

He added; “EFRIS 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.

Mr Kayemba further observed that however, there are some challenges on the implementation side of it-challenge on sensitization, implementation and infrastructure.

UMA says that the improved tax collection recorded by URA prompted them to rapidly rollout to other players in the economy. This rapid move, without prior adequate sensitization and education on the use of the system has caused this impasse.

“Implementation penalty under EFRIS,there is high handedness on penalty yet the implementation still has some challenges that must be addressed on both sides -the tax payers and URA,” Mr Kayemba said.

He added; “Irrespective of the value and turnover of the tax payer, each invoice attracts Shs 6million.”

The manufacturers also complained over Non-standardized valuation guideline for goodswhere various valuation methods used for customs valuation by URA.

“UMA proposes that while URA can use the various valuation methods, the resultant tax effect should be the same,” he said  

Adding; “For transparency and certainty, customs values on the basis of the basis which tax is computed should be standardized for a period of at least 90 days and be published widely for information to the trade sector.”

The pain

Value-added tax (VAT) collection is made easier by EFRIS, which is intended to track VAT payments and make proper record-keeping for business transactions easier.

The traders has opposed the installation of this system, despite its stated advantages.

Traders contend that the EFRIS system has significant implementation costs because it requires the use of contemporary technological tools, like laptops or smartphones, in addition to additional equipment needed for printing receipts.

This financial strain has exacerbated the merchants’ complaints and stoked their continuing conflicts with the URA.

The business community is unhappy as the tax burden has increased as a result of the Finance ministry at the beginning of this month made proposals for different measures aimed at increasing revenue in the upcoming fiscal year.

Mr Kiyemba said the trade sector should be given a moratorium up to June 30 to allow them run down their stock that may have come in without complying with the new EFRIS.

Finance Ministry should drop EFRIS related penalties that were issued against all traders and manufacturers.

‘This will enable the trade and manufacturing sector to start from a new page in the financial year, 2024/24,” he said.Adding; “During the ongoing consideration of tax bills by Parliament for the FY 2024/25, penalties associated with the implementation of EFRIS should be based on the invoice value and we propose a penalty of 1 percent of invoice value to drive compliance