Do more sensitisation on EFRIS, govt told
Many traders cite a lack of understanding of the EFRIS system. Photo / File
What you need to know:
- EFRIS has previously faced resistance, with several taxpayers citing a lack of understanding of the system
Government still has a lot of work to do to educate the business community about Electronic Fiscal Receipting and Invoicing Solution (EFRIS) to achieve targeted collections, a study by Economic Policy Research Centre says.
EFRIS, a digital solution that eases the sharing of transactions between URA and VAT-rated traders in real time for tax reconciliation, has previously faced resistance, with several taxpayers citing a lack of understanding of the system.
It was launched in 2019, but a study by EPRC found that several firms were at risk of non-compliance, which underscores the necessity for enhanced tax education and enforcement to fully leverage the benefits of EFRIS.
While presenting the study in Kampala, Dr Corti Paul Lakuma, the EPRC senior research fellow, said the study, which focused on EFRIS, found that the system had positively impacted tax collection, noting that companies that voluntarily enrolled on to the system had, in slightly over a year, grown from 35 firms in May 2020 to a cumulative average of 5,584 companies by December 2021.
“Our study found that by January 2021, 5,547 firms had enrolled after a grace period of 10 months. By September 2021, enrollment had grown to 5,567 firms [and] by December 2021 they had grown to 5,584,” he said, noting that there has been a general improvement in business performance as a result of the adaptation of EFRIS.
For instance, he said, several firms have registered an increase in sales, purchases, value-added, and value-added tax payments of more than 10 percent in the first year of implementation.
However, he noted, the impact reduced over time due to slow adoption among small firms, despite the system's potential to enhance tax compliance.
Early this year, traders, especially in the Kampala Central Business District, thrice closed their shops citing the manner, which they described as unfair, in which URA was handling non-compliance with the EFRIS system.
Traders complained about large penalties and dentation of customers found in possession of goods without an e-receipt.
The traders have since held several meetings, including with the President to find a solution.
Ministry of Finance has previously claimed that there could be officials at URA, who are conniving with traders to frustrate the full potential of the EFRIS system.
