URA: Small Businesses, Low-Rent Taxpayers Exempted from EFRIS

The government, through the Uganda Revenue Authority, has released a list of businesses required to use the Electronic Fiscal Receipting and Invoicing Solutions (EFRIS).

The businesses include manufacturing, mining and quarrying, water supply; sewerage, waste management and remediation activities; transport and storage; construction; electricity, gas, steam and air conditioning supply; real estate activities; accommodation and food service activities, information technology and communication; professional, scientific and technical activities; arts, entertainment and recreation, and wholesale and retail of fuel.

URA introduced EFRIS in 2021 to address tax administration challenges relating to business transactions and the issuance of receipts. This requirement is in addition to the existing mandatory EFRIS obligation for all VAT registered taxpayers.

URA Commissioner General John Musinguzi says that “The use of EFRIS has reduced administrative inefficiencies and enhanced the integrity of tax records.”

He acknowledged that since the system rollout in January 2021 during the Covid-19 pandemic, URA initially lacked the capacity to adequately educate the public, creating an information vacuum and subsequent resistance.  

However, he revealed that the taxman has since embarked on countrywide sensitization, and that the URA continues to engage all stakeholders on the use of EFRIS.

‘’We have met different stakeholders including traders and manufacturers and we continue to engage the taxpayers,’’ said Musinguzi.

Denis Kugonza, Commissioner, Domestic Taxes at the URA, said that EFRIS ensures that everyone pays their fair share of tax.

“EFRIS ensures that you pay exactly what you are supposed to pay. Meaning, if we all pay what is required of us, the burden won’t be on just a few,” said Kugonza.

Kugonza said the expanded rollout is expected to formalize more businesses, strengthen tax compliance, enhance transparency in commercial transactions, improve the accuracy and fairness of tax assessments, and create a level playing field for compliant taxpayers.

By enforcing full usage for all VAT registered taxpayers and broadening the adoption of EFRIS, Kugonza added that the taxman aims to curb revenue leakages by minimizing the opportunities for tax evasion, promote fair competition, and create a more equitable business environment by ensuring all qualifying businesses adhere to the same fiscal reporting standards.

However, Kugonza said that not all businesses are supposed to use EFRIS. For instance, he said small businesses in the above listed sectors with sales value (turnover) of less than UGX 10,000,000 per year, and taxpayers earning rental income less than UGX 2,820,000 annually, are exempt.

Kugonza added that small businesses doing business with EFRIS-compliant entities will be required to adopt the use of EFRIS.

Kugonza called for cooperation among taxpayers in the use of EFRIS. He also appealed to Ugandans to help streamline the collection by demanding an EFRIS receipt when they make a purchase.

EFRIS Compliance

Similar solutions have also been implemented across East Africa. Kenya, for instance, has introduced the Electronic Tax Invoice Management System (eTIMS), while Rwanda uses Electronic Billing Machines (EBMs), and Tanzania relies on Electronic Fiscal Devices (EFDs) and approved Virtual Fiscal Devices (VFDs).

These digital tax systems have helped revenue authorities strengthen tax compliance, broaden the tax base and improve revenue collection. In Rwanda, for example, value-added tax (VAT) collections accounted for approximately 30 percent of the Rwanda Revenue Authority’s (RRA) total revenue collections in the 2024/25 financial year, underscoring the significant contribution of technology-enabled tax administration to domestic revenue mobilisation.

Beyond Africa, countries such as Brazil, Belgium and France, where the tax-to-GDP ratio is above 30 percent, also adopted similar digital technologies to streamline tax administration and facilitate tax refunds.