EFRIS: Path to fair taxation

Rytter. K. Muzira  

What you need to know:

  • Let us see EFRIS as a gateway to redefining our economic landscape, nurturing a taxpaying culture grounded in fairness and accountability, propelling Uganda into a new era of prosperity.

As technological advancements and economic development reshape the global landscape, nations find themselves at a crossroads between traditional methods and innovative solutions. 

Uganda, like many of its global counterparts, is on the verge of a transformative shift. Central to this change is the integration of technology into its tax administration framework, ushering in a new era of efficiency and transparency.

While the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) is under scrutiny, with a segment of the trading community advocating for its suspension or abolition, this viewpoint fails to consider the wider consequences of such a move. The essential question we should be addressing is not whether we should adopt technology, but rather how we can utilise it to promote a fair and transparent taxation system.

The implementation of EFRIS in 2021 was a strategic move to address tax administration challenges, enhance business efficiency, and reduce the cost of compliance. This system is not only about tax collection; it is about enabling businesses to thrive and foster accountability. EFRIS is more than a system; it embodies a commitment to equity and accuracy in tax assessments. Without a comprehensive platform that provides precise data, the taxman risks relying on assumptions, leading to inaccuracies in tax collection. By ensuring data accuracy, EFRIS helps break this cycle.

As URA Commissioner General John Musinguzi recently highlighted implementing EFRIS across all business sectors is projected to double our Value Added Tax (VAT) collections from Shs3.5 trillion to an estimated Shs7 trillion. This increase goes beyond merely meeting revenue targets for URA; it signifies the potential for improved public services, enhanced infrastructure development, and a more robust economy, creating a win-win for all citizens and key economic stakeholders.

The proposal for selective implementation, as suggested by some business stakeholders, would create disparities, disadvantaging those who have already adopted the system. This could potentially force these businesses to close, as it would create an uneven competitive business landscape. A universal application ensures that all businesses, regardless of size, contribute their fair share of tax, fostering a competitive market where success is dictated by merit rather than tax avoidance.

As Ugandans, we should wholeheartedly embrace technology as a catalyst for development. Currently, we lag behind on the technological ladder, but it’s time to catch up. According to URA data, our regional peers - Tanzania and Rwanda - have harnessed the advantages of fiscal receipting technology for over a decade, with VAT contributing 33 percent and 30 percent of their total tax revenue, respectively. 

In contrast, Uganda’s VAT collection stands at approximately 15 percent. By universally adopting EFRIS, we can unlock immense growth potential. The journey towards technological integration is not without its challenges. However, these operational hurdles are stepping stones to improvement. As His Excellency, the President wisely advised that the system should be modified to address the issues identified by traders, demonstrates that feedback and adaptation are essential to the lifecycle of any technological solution. 

With time and perseverance, EFRIS will become a seamless part of Uganda’s economic and business fabric. During the recently concluded EFRIS penalty waiver week, Mr Musinguzi reaffirmed URA’s commitment to fostering open dialogue with the business community, encouraging feedback, providing education, guiding traders through onboarding sessions, and conducting targeted awareness campaigns.

As we look to the future, let us see EFRIS as a gateway to redefining our economic landscape. It allows us to nurture a taxpaying culture grounded in fairness and accountability. Together, we can create a legacy of equitable taxation that will propel Uganda into a new era of prosperity.

Ms Rytter. K. Muzira is Team Lead Media-Relations and Communications at URA