The business community in Uganda has expressed their disappointment in the way the Uganda Revenue Authority (URA), is harshly taxing their businesses.
Retailers, particularly supermarket owners, claim that the implementation of Electronic Fiscal Receipting and Invoice Solutions (EFRIS) has led to a significant increase in the complexity of business operations.
According to them, URA has enforced the EFRIS system exclusively on retailers, disregarding the inclusion of Manufacturers, Wholesalers, and Suppliers, especially those operating in Kikuubo.
“URA has fully enforced it on retailers & forgot to start with Manufacturers, Wholesalers and Suppliers, especially Kikuubo,” Issa Mugerwa, one of the supermarket owners in Kampala said adding that the majority of retail shops and supermarkets source their products from Kikuubo, yet these individuals do not issue e-invoices.
Mugerwa further emphasizes that supermarkets have been subjected to considerable pressure by URA, including penalties, despite URA’s incomplete comprehension of the difficulties they encounter while utilizing EFRIS.
He says URA should prioritize the full implementation of EFRIS on Wholesalers and Manufacturers before hastily penalizing retailers.
Mark Olwenyi, a retailer in Mengo, suggests that URA should organize door-to-door awareness campaigns rather than solely depending on social media platforms such as YouTube and X (formerly known as Twitter).
“Many business owners in this sector have limited time to spend watching lengthy videos online,” he said.
Olwenyi has made a formal request to URA, urging them to reevaluate the 18% VAT charge and consider reducing it to either 12 or 15%.
He argues that the existing tax rate is unreasonably high, especially when taking into account that the majority of businesses operate with a profit margin ranging from 20% to 25%.
“Furthermore, we kindly request URA to reconsider the 18% VAT charge and reduce it to 12 or 15%. The current tax rate is excessively high, considering that most businesses operate on a profit margin of 20-25%. When the 18% tax charge is added, it significantly increases the prices of products, making them unaffordable for some customers,” he added.
Asuman Mutebi, hailing from Nakawa, expressed the view that URA should prioritize the enhancement of their rapport with taxpayers and the improvement of their public perception. The strategy of doubting the integrity of taxpayers is proving to be ineffective.
URA officials should consider adopting a more collaborative and consultative approach, rather than excessively imposing harsh measures on taxpayers.
Hannington Mutabazi, a businessman in Bweyogerere said that there is a knowledge gap when it comes to some of the taxes imposed on the businesses.
“The Electronic Fiscal Receipting and Invoicing System (EFRIS) is not clearly understood. I am not aware of how it operates fully and yet we are losing a lot of money for not complying with it. We need more enlightening about it,” he said.
He went on to question how tax holidays are awarded to businesses in the country.
EFRIS is an automated compliance process established by the URA which aims to handle the allocation and centralized tracking of all invoices and receipts by specified taxpayers in Uganda.
Most traders in the dialogue expressed their frustration at the aggressive manner in which URA treats businesses downtown.
They decried how enforcers came threatening to close my business. According to the traders, tax agents usually come in huge numbers of 2O, with a number of them in possession of guns. Is all that enforcement needed? Can’t two people close my shop?” one of the traders exclaimed.