Businesses stuck after URA halts  online credit notes

Mr Ibrahim Bbosa, the URA assistant commissioner public and corporate affairs. PHOTO/ COURTESY 

What you need to know:

  • Mr Bbosa noted URA had temporarily halted auto approvals with a provision for business to download forms online, which they would submit for approval. He also said the commissioner has discretion on how the process is managed, noting there was no illegality as it was being claimed.  

Businesses are struggling to reconcile their transactions after Uganda Revenue Authority (URA) suspended issuance of credit notes, citing abuse and manipulation. 
The suspension, which URA has said is an “administrative procedure” means that businesses cannot reconcile what has been sent to the market and returned as unsold, without URA’s physical approval unlike when approvals have been done online previously. 

The suspension, Monitor understands has been ongoing for weeks with operations involving sales returns, which is a normal part of running a business, being frustrated by an indefinite administrative procedure, with the most affected being manufacturers, processors and providers of regular services spoken to saying “we are stuck  and frustrated”.  
URA now wants taxpayers who must issue credit notes to seek approval. 

However, Mr Albert Beine, the Global Taxation Services chief executive officer and founder, on Monday told Monitor the suspension was illegal, noting that anything that restricts or suspends issuance of a credit note must be based on the law.     
“First of all a credit note is provided for by law for the operation of Electronic Fiscal Receipting and Invoicing System. And if it is being misused then it is the law that should address the gap instead of a blanket decisions,” he said, noting what URA is doing has significant impact on how business is done. 

The suspension, he said, means that businesses cannot receive payment and cannot pay, which eventually will make URA suffer in terms of reduced tax collections, wondering why URA would take such a measure. 
However, Mr Ibrahim Bbosa, the URA assistant commissioner public and corporate affairs, said the suspension was an administrative procedure that would require approval for a credit note to be issued. 

“Initially it has been auto approval in the system. But after analysis, we observed that some taxpayers have been abusing the system by making claims, which basically exceed their revenues. We have seen people making reversals of transactions that have already happened and by doing so they are basically abusing and cheating the system,” he said.  

Welcome!

You're all set to enjoy unlimited Prime content.