OPINION
In recent weeks, tensions have brewed between city traders and the Uganda Revenue Authority (URA) over the implementation of the Electronic Fiscal Invoicing and Receipting System (EFRIS).
Traders have lamented the heavy-handed enforcement of the system, leading to a week-long strike organized by their umbrella bodies, KACITA and FUTA. Despite URA’s insistence that EFRIS is not a tax, some traders, unfamiliar with the intricacies of the system, perceive it as such, while others, more acquainted, view it as a mechanism aimed at eventually transitioning everyone to Value Added Tax (VAT), albeit with a current low threshold.
It’s worth noting that the VAT threshold, set at 150 million Ugandan shillings annually as per the VAT Cap.345, was established over seven years ago. Considering inflation and evolving market dynamics, businesses achieving a turnover of 150 million shillings are no longer the titans they once were. This renders the VAT threshold unrealistic, placing undue financial strain on Small and Medium Enterprises (SMEs) and fostering an environment of unequal competition against larger entities.
In light of this, the government, via URA, must contemplate raising the threshold to safeguard SMEs and foster a level playing field. City traders apprehensively foresee that under EFRIS, virtually all businesses will be compelled to remit VAT, a levy traditionally associated with major industry players, given the incongruously low threshold amidst Uganda’s economic landscape.”
