URA recently started implementation of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), a medium that is being used by all businesses to manage issuance of receipts and invoices for tax purposes. The system was effectively rolled out on January 1, despite pleas from companies for an extension. Ian Rumanyika, the Uganda Revenue Authority (URA) manager public and corporate affairs explains the progress and benefits of the system.
EFRIS implementation commenced on January 1. What is the progress so far?
Currently, a person who conducts business and is value added tax (VAT) registered is required to issue an e-invoice or receipt for any supply or sale regardless of whether the supplied or sold good is subject to VAT at a standard rate, zero rate or exempt.
However, those who are VAT registered may voluntarily use e-receipts for record keeping, quick processing of tax claims or refunds and fair tax assessments, among others.
Away from improving compliance what else is good about EFRIS and what are the costs involved?
Of course, it is a smart business solution that provides businesses with a platform to maintain records in an easy, secure and retrievable digital format.
The system also provides a variety of options, which include system-to-system integration that allows a business to issue invoices using its own EFRIS integrated system, URA Web Portal, where a business issues invoices directly from the EFRIS Web Portal and the desktop or client application, which allows a business to issue invoices directly from an EFRIS downloaded application.
Therefore, the cost of implementing EFRIS varies. For instance, the web portal and desktop application options are relatively free with minimum administrative overheads such as Internet or power utilities while the system-to-system integration may attract a minimum cost of integration with EFRIS and the charges vary from vendor to vendor.
However, one way of minimising the integration costs is to opt for business systems that have already been integrated with EFRIS and accredited by URA. The supplier of such software or system charges the business a minimum fee of upgrading the system to include EFRIS compliant features.
Uganda was the last country in EAC to implement EFRIS. What lessons have you picked from other member states that implemented the system before you?
Our solution is an upgraded version compared to all other member states. Some of the key lessons which we have taken include the fact the solution must be implemented with the view of facilitating compliant taxpayers to realise benefits of automation. Accordingly, EFRIS is designed to improve business efficiencies and reduce the cost of compliance through improved record keeping among taxpayers.
The system also gives business the ability to track and authenticate business transactions in real time and ease fast-tracking of payment of refund claims.
How different is EFRIS from the previous solutions such as the Fiscal Device you had been using?
Fiscal Device required us to periodically collect transaction data from businesses. However, EFRIS provides real time exchange of transaction data from the business to URA.
Similarly, unlike EFRIS, Fiscal Device did not provide for an offline mode to support business continuity in case of unreliable Internet connectivity.
What has been your experience and challenges so far?
Considering that EFRIS has just been rolled out, no significant challenges have been experienced so far. However, the major challenge was during the early period of sensitisation of taxpayers in July to September 2020.
Since EFRIS implementation commenced during Covid-19, the lock down measures and limitation could not allow proper training of taxpayers.
The other challenge is that the system integration option, which is preferred by majority of the large and medium taxpayers requires some time to have the integration built and tested before it can be implemented. The time required to complete this integration varies from vendor to vendor of taxpayer’s business system.
Additionally, some of the taxpayer’s businesses systems are either centrally managed or supplied by foreign vendors whose integration schedule were also affected by Covid-19 measures.
Good enough, majority taxpayers are now completing their integrations using other available options.