Traders Strike: Gov’t to waive penalties on EFRIS

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KAMPALA - Finance Minister Matia Kasaija has said that the Uganda Revenue Authority (URA) will exercise greater sensitivity while enforcing the Electronic Fiscal Receipting and Invoicing System (EFRIS).

Kasaija said the move will give traders and taxpayers time to familiarise themselves with the system. Kasaija’s response in a statement is part of the interventions the government will take to ease tensions with traders.

EFRIS is a system developed by URA that enables business operators to transact and manage the issuance of e-receipts and e-invoices in real-time. Business operations in the central business district have remained under lock and key since the beginning of the week largely over the implementation of the EFRIS by the taxman.

On April 16, traders’ leaders presented a number of their grievances to the Minister of Finance, alongside other key government officials at the Finance ministry headquarters.

“URA shall continue to implement the EFRIS. However, emphasis shall be placed on sensitisation and handholding of taxpayers to appreciate the EFRIS and also ensuring that it is demystified among all taxpayers,” Kasaija said. (New Vision/Files)

“URA shall continue to implement the EFRIS. However, emphasis shall be placed on sensitisation and handholding of taxpayers to appreciate the EFRIS and also ensuring that it is demystified among all taxpayers,” Kasaija said.

“With immediate effect, URA shall establish an office in Kikuubo that is solely dedicated to providing EFRIS support services to all traders and other taxpayers…. It was agreed that traders shall immediately resume normal business as Government concludes internal consultations and further engagement with the leadership of the Traders. The consultations shall be concluded within two weeks.”

The five demands from traders

During the April 16 meeting with Kasaija, traders presented at least five key demands for the government to address.

Pedestrians walk past closed shops along Luwum Street as traders protested URA's Electronic Fiscal Receipting and Invoicing System (EFRIS) on Tuesday April 16, 2024. (Credit: Mpalanyi Ssentongo)

Traders requested that the government consider increasing the VAT threshold from sh150m to sh1b and reducing the VAT rate from 18% to 16%.

Traders expressed concerns regarding challenges posed by the EFRIS, including high compliance costs, lack of understanding among traders, and its application to all traders regardless of VAT registration.

Traders argued that the import duty of $3 and $3.5 per kg or 35% (whichever is higher) for textile fabrics and garments respectively is excessively high.

Traders pointed out inconsistencies in valuation by URA for the same imported items among different importers and at different times.

They emphasised the need for certainty and uniformity in tax liability on imports and recommended URA adopt valuation methods consistent with WTO customs valuation, providing annual value guidelines where necessary.

Regarding anti-competitive practices by manufacturers, traders argued that some manufacturers, particularly foreign investors, engage in distribution, wholesale, retail, and hawking of their products, leading to price undercutting and decreased sales.