April 12, 2024

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Electronic Receipts: Consumers To Foot Costs

3 min read

As Uganda Revenue Authority implements the Electronic Fecal Receipting and Invoicing Solution (EFRIS), traders and other taxpaying companies fear that the cost of doing business will increase.

The URA has got a go-ahead to continue implementing EFRIS, after the High Court dismissed a petition by five companies which were last year enrolled to pilot it.

EFRIS is a solution that is used by businesses to manage the issuance of receipts and invoices for tax purposes in accordance with the Tax Procedures Code Act 2014. 

At the point of buying or paying for a good or service, the system transmits the transaction details electronically to the URA in real time and a tax is processed and included on the invoice or receipt for the customer paying for the goods. 

The solution was aimed at curbing the loss of tax through loopholes that have enabled businesses under declare sales to pay less taxes than they are supposed to. 

It is also aimed at curbing non-issuance of tax receipts or invoices by traders and service providers, who also make false claims for taxes among others.

Businesses will now have to foot the cost of installing and managing the system, which cost is likely to be transferred to the customers. 

“URA introduced e-receipting and e-invoicing to bring the large informal sector on board. We have been having limited access to taxpayers’ records but with this system, more businesses will come on board,” said Ian Rumanyika, the Corporate Affairs Manager. 

When the system was introduced early this year, five supermarkets, Capital Shoppers, Mega Standard, Kenjoy, Jazz and Quality, were chosen to pilot it for eventual rollout in September 2020. However, the companies petitioned court to stop it, citing several issues including the cost of installing the equipment for implementation of the system.

They were accusing the URA of not consulting with the business community on the implementation of the system.   

The petitioners also said the criteria used to select them was illegal, adding that by choosing to implement the system on a few businesses instead of all the businesses, was selective application of laws. 

Some shoppers who have transacted at these points say, sometimes the system takes a lot of their time before they are given their receipts.   

They also say it is tiresome because every time one goes to transact, they have to wait for a code to be processed and sent to their email of mobile phone to complete the process.   

There are also complaints of technical mishaps which may either delay or fail the completion of the transaction all together.   

It is some of these concerns that made the tax authority postpone the implementation to January 1st 2021, but URA says this was a grace period to enable the companies make the necessary preparations.

It says it initially trained 58 businesses including the petitioners, to pilot the project, and this was expanded to more than 300 taxpayers.   

According to URA, the solution is part of the innovations under the Domestic Revenue Mobilization Strategy that runs to 2023/2024. 

The strategy supported by the International Monetary Fund is aimed at increasing locally raised government revenue to cut down on borrowing and tame the rising cost of servicing debt.    

Uganda’s level of local domestic revenues is among the lowest in Africa and the world, accounting for just 15% of GDP, as at 2019, compared to a sub-Saharan African average of 17.5%. 

“Over the past years, revenue collections have remained low and this is attributable to key challenges that directly impact on revenue mobilisation that include; under-declaration of sales, false refunds and offset claims, a large and difficult to penetrate informal sector (for tax purpose), poor record keeping by taxpayers,” says URA in its defense.   

The authority has not yet said how much additional revenue this strategy will bring in.


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