The Uganda Revenue Authority (URA ) Commissioner General, John Musinguzi (pictured), has said Uganda is losing around Shs4Trn annually in uncollected tax , noting that the Electronic Fiscal Receipting and Invoicing System (EFRIS) will ensure that all VAT taxpayers pay their fair share of tax.
Musinguzi made the remarks while appearing before the Committee of Commissions, Statutory Authorities and State Enterprises (COSASE), where URA had been summoned to respond to queries raised in the December 2023 Auditor General’s report.
“We estimate to be losing taxes in range of Shs4Trn uncollected because of lack of capacity to monitor the level of transaction in businesses. We have been having Value Added Tax for close to 30years but we only have 32,000 taxpayers on the VAT register. They are expected to voluntarily declare that I am above the threshold of Shs150M per annum, so, a number of businesses say we are below. And we have no capacity to know this, until we have such a technology to tell us,” said Musinguzi.
Musinguzi’s remarks were in response to a question posed by Medard Sseggona (Busiro East) who tasked the Commissioner General why the tax body caused paralysis in the business community with the EFRIS to the extent of exposing President Museveni to a standoff with the traders at Kololo, a standoff he said caused embarrassment in Uganda.
Sseggona said, “I know you have been grappling with the issue of Electronic Fiscal Receipting and Invoicing System (EFRIS) and you know how far it has stretched us including attracting a major standoff between URA and our major collection points, the traders.”
“Would you like to use the platform of Parliament to tell us what EFRIS stands for and why it has become controversial lately and why such a matter couldn’t be resolved without escalating into strike and involving the Head of State who had to get into a standoff with the traders publically that embarrassed the nation? Is it work methods, is it misconception of it is sheer hate that people don’t want to pay taxes?” added Sseggona.
The Commissioner General attributed the standoff between traders and URA on the tough penalties provided for in the law of enforcing EFRIS, which he said were high, but these penalties have since been waived and now URA has embarked on education and sensitization of traders across the country, adding that EFRIS is already being used by manufacturers, corporate companies and after the campaign with traders.
“The penalties for enforcement were quite high, so irrespective of what you are trying to sell without the E-receipt, the penalty was Shs6M. So I think the toughness in the penalty and the toughness in the enforcement campaign caused this. However, following the meetings and guidance, we stopped issuing penalties and we went back to engagements and more sensitization. And this is what we have been doing for the last one month, we have stopped enforcement operations, we have educated and we have even waived the penalties that were issued to the new people who hadn’t easily understood EFRIS,” said Musinguzi.
According to URA, the standoff between Government and traders isn’t unique to Uganda, as the same opposition to EFRIS was witnessed in Tanzania and Rwanda and Musinguzi revealed that after the traders, EFRIS will be extended to all VAT taxpayers.
“We have also checked the trends of all countries that have adopted this technology, especially within our environment-the East African Community. Tanzania has been using the same technology for more than 19years, Rwanda has been using the same system for more than 10years, even Kenya, when you are starting, there is always resistance, closure of businesses, there are standoffs, but as we explain and engage home, people understand that this system is good for them, it is good for the Government,” added Musinguzi.
