Court throws out petition against URA’s e-receipting

The High Court has rejected an application in which five supermarkets had sought to stop Uganda Revenue Authority (URA) from selectively implementing the Electronic Fiscal Receipting and Invoicing Solutions (EFRIS). 
In a case filed by Capital Shoppers, Quality Supermarket, Kenjoy, Jazz Supermarkets and Mega Standard, the fives retailers had prayed for court orders against URA, among which included an injunction blocking implementation of EFRIS with the applicants as pilot candidates. 

The retailers, according to court documents, had argued that the pilot exercise was illegal and discriminatory. 
However, in his ruling last week, Justice Musa Ssekaana ruled that URA should go ahead to implement the EFRIS, reasoning that the application had been overtaken by events. 

“The applicants’ main grievance was about being selectively chosen as pilot candidates for the pilot exercise for the implementation of the Electronic Fiscal Receipting and Invoicing Solutions (EFRIS). The said pilot scheme was abandoned by the respondent [URA] and the same has been overtaken by gazetting the law, which now applies to all VAT [value added tax] registered taxpayers,” the ruling reads in part. 
Gazetting all VAT registered taxpayers to be liable to e-invoicing and e-receipting, Justice Ssekaana ruled, is not illegal or irrational as contended by the applicants, noting: “The same is within the ‘four corners of the Tax Procedure Code Act”. 

The retailers had argued that the unilateral decision by URA to select them as pilot candidates for the pilot was is illegal, ultra vires, discriminatory, unfair and not supported by any legal framework.  
In a case filed through Ortus Advocates, the retailers had also argued that it was unfair and discriminatory for them to pilot the exercise yet there are many other value added tax registered tax payers that were not undertaking the new tax system. 

On January 1, URA started the implementation of the Electronic Fiscal Receipting and Invoicing Solutions, which requires all value added tax registered businesses to issue electronic receipts or invoice for every supply or sale.    
In its defence, URA had argued that between the months of February and June 2020, it had selected 58 taxpayers, including the five applicants and had carried out various sensitisation drives and stakeholder engagements on the implementation and rollout of EFRIS and more than 300 taxpayers had been trained as part of the pilot project. 

It also argued that implementation of EFRIS is lawful as inscribed in the Tax Procedures Act. 
“The tax Procedure Code Act was amended to provide for electronic receipting and invoicing by specific taxpayers,” URA said in its defence.

Mr Ian Rumanyika, the URA public and corporate affairs communication manager, told Daily Monitor, the ruling should be viewed as a win-win for retailers, taxpayers and government.
“It allows taxpayer to take charge of their transaction and gives us insights on what the taxpayer is selling. It also empowers the consumer to know if the seller is authentic. Uganda has been lagging behind [compared to other] regional counterparts in implementation of EFRIS,” he said.
Implementation                                
URA started implementation of EFRIS this month with more than 300 value added tax registered taxpayers. 
EFRIS is a tax compliance solution geared towards managing issuance of receipts and invoices for tax purposes. The system is expected to transmit details of transactions to URA in real time which will curb under declaration among other challenges. 
In the midst of a pandemic, URA has a steep target to hit while looking at domestic taxes to achieve its objective.