What you need to know:
- Mr Ibrahim Bbosa, the URA spokesperson, said the Section 28 of the Value Added Tax (VAT) demands that those who want to claim for VAT can only do so if they have either an e-invoice or e-receipt.
The Uganda Revenue Authority (URA) has asked customers who purchased prepaid electricity but were unable to access their details to update their data with Umeme so that they will be able to receive electronic vouchers.
According to URA, this will enable them to claim for Value Added Tax refund from the revenue body.
This publication broke the story of how consumers, who qualify for VAT refund, were stranded and angry after they failed to get e-invoices and receipts. A number of power consumers on Yaka, the prepaid system for small and medium businesses, had accused Umeme of deliberately not issuing them with invoices and receipts, which they would use to claim for VAT.
Mr Ibrahim Bbosa, the URA spokesperson, said the Section 28 of the Value Added Tax (VAT) demands that those who want to claim for VAT can only do so if they have either an e-invoice or e-receipt.
“Therefore, all electricity consumers are required to ask Umeme for e-invoices,” he said yesterday.
The law provides that to claim input tax for local purchases/expenses, there should be documentary evidence of an original tax invoice. For imports, there should be the customs bill of entry, a URA tax receipt or other forms of evidence for proof of payment.
However, the same law also provides an exception and says input tax credit may be allowed where failure to acquire a tax invoice is not the fault of the taxpayer and the amount claimed is correct. If the original tax invoice is lost, one can use a certified copy from the supplier.
Mr Bbosa said Umeme is currently in the process of upgrading its billing system and was not able to fully integrate with the Electronic Fiscal Receipting and Invoicing Solution (EFRIS).
“To comply with EFRIS requirements, Umeme temporarily integrated its current system with URA to facilitate clients getting e-invoices for all postpaid and prepaid transactions. Currently, Umeme only issues e-invoices for all YAKA transactions to clients who have updated their profiles with Tax Identification Numbers (TINs). We advise affected clients to provide or update Umeme with their TIN to claim input tax credit relating to YAKA transactions,” he said.
Mr Bbosa said Umeme is working to complete a full system-to-system integration with its new system to enable instant notification of Fiscal Document Numbers (FDNs) to all clients.
“This will allow clients to claim input tax credits relating to YAKA transactions,” he said.
The current system only recognises those who present invoices showing that someone has been invoiced and has paid the necessary taxes. Such a person, if registered and qualifies for VAT refund, can then claim it.