Kampala City Traders Association Mr Issa Sekitto during the interview. PHOTO/MICHAEL KAKUMIRIZI
After weeks of protest over the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), President Yoweri Museveni eventually met the traders on May 7 at Kololo Ceremonial Grounds to give feedback on the matter. The meeting, however, ended with traders, mostly involved in import trade, looking dissatisfied with the outcome. Prosper Magazine’sIsmail Musa Ladu spoke to the spokesperson of Kampala City Traders Association (KACITA) Mr Issa Sekitto and Uganda Revenue Authority’s spokesperson, Mr Ibrahim Bbosa Kibuuka about the future of EFRIS, a system meant to facilitate the issuance of electronic invoices and receipts, ensuring prompt recording and reflection on the URA portal.
What are your thoughts about the President’s position on EFRIS and its application?
Sekitto: We don’t think the President’s position on EFRIS and its application was made clear enough. He didn’t pronounce himself on waivers on penalties. As the business community, we need clarity ahead of another meeting with the President should the opportunity arise. We now don’t know how to move forward with the loopholes that are inherent in the EFRIS system. I think very many people were left in suspense and crestfallen. They did not know what to do next. They are under fear. Largely, we don’t know how to move with the EFRIS programme now because it is not something that is easily understood. Most traders hoped that EFRIS should have been meant for manufacturers because they recommended it for themselves.
Bbosa: The President of the Republic of Uganda, acknowledges the important role of EFRIS in enabling businesses to grow and benefit the country and its citizens. Moving forward, Uganda Revenue Authority [URA] will continue to simplify its processes and make them more user-friendly for traders. Additionally, a dedicated support team will be established to onboard new traders and assist those already enrolled in the system. URA will also regularly engage with traders to better understand their challenges when interfacing with the system, rather than penalising them. It is hoped that these strategies will reduce resistance and increase adoption, leading to increased revenue collection.
Uganda Revenue Authority’s spokesperson, Mr Ibrahim Bbosa Kibuuka. PHOTO/File
What aspect of the President’s position on EFRIS do you agree with or disagree about?
Sekitto: There are some aspects of the President’s position on EFRIS that I can agree with. For example, we must sort out the issue of spoiled or returned or unsold goods for which invoices were drawn yet no cash sales were made. The President also seemed concerned about the heavy penalties for traders operating without EFRIS and I thought he was right about this. The penalty ranging in upwards of Shs6 million for not having EFRIS is not only harsh or even unjustifiable but could be unlawful. The President appears to have opposed it, and that is something we concur with.
Bbosa: EFRIS is a solution that assists businesses and the Uganda Revenue Authority (URA) in accounting for VAT and ensuring compliance. Moreover, the initiative to promote Ugandan businesses’ reduction of imports and prioritise domestic trading to foster local production and protect local industries is highly commendable.
Did the President‘s meeting with traders meet its objective? If so, briefly explain how.
Sekitto: We were hoping that EFRIS would be suspended or delayed. Both of these objectives were not met. We believe that businesses with turnover of Shs150 million shouldn’t be part of EFRIS. We recommend that it should be enforced on businesses generating a billion shillings or more. This too was not achieved. Therefore, we think the objective of the meeting with the President wasn’t achieved as we had anticipated.
Bbosa: Yes, it did achieve the objective. At least now, we have received an endorsement to continue the training programme for taxpayers on how to use the EFRIS system. As flag bearers of revenue mobilisation, we expect to see a rise in voluntary compliance levels among the taxpayers who have embraced the system. This will help Uganda to fully fund its expenditure and contribute to the revenue basket.
Several traders, if not most, didn’t appear satisfied with the President’s position on EFRIS. Is that an accurate assessment?
Sekitto: The level of dissatisfaction is evident. And this is not good in terms of fostering a relationship with the taxman. Many of the young traders after the meeting with the President were not optimistic at all, saying they have lost hope and are looking to exit business. This doesn’t s augur well with the objectives of EFRIS and the future.
Bbosa: Yes, it is an accurate statement, and it is understandable. However, as URA, we see this as an opportunity to equip the traders with all the necessary information they need for their businesses to grow and help them become compliant. This means that we need to intensify our physical engagements, hold taxpayer advisory visits, set up mobile tax offices in busy areas, and simplify content to suit different audience segments.
Did this matter of EFRIS have to come to this end, for example, closing shops and meeting the President?
Sekitto: I don’t think the matter of EFRIS and its resultant enforcement should have led to the closure of businesses. It didn’t even necessitate the meeting with the President. URA could have handled this matter better because Uganda is here to stay and traders are not about to disappear.
Kindly understand that tax collection with the aid of EFRIS is a new way of doing things. URA should have been more tactical in its approach even if it means extending enforcement of EFRIS, so be it. The other alternative was to work with already registered VAT entities in a way that they can be used as a reference point or emulated as a success story.
We are also largely an informal economy, meaning that continuous training and education is of paramount importance. This cannot be achieved with threats and imposition of penalties for every single contestation. We don’t support bothering and threatening people who are not part of this cause. Simultaneously, we don’t think having heavy army deployment in the traders’ places and vicinity of work was necessary.
Bbosa: It was not necessary for the traders to disrupt the programme, but some traders intentionally caused frustration and disrupted the businesses of other traders who were paying their fair share of taxes to sustain the country. They aimed to force every trader in Kikuubo to join their demonstration instead of engaging in a dialogue to sort out the weaknesses within the system and avoid breaking the law.
Military and police officers jointly man Nakivubo where demonstrators had lit car tyres on April 16, 2024, as city traders took part in the countrywide sit-down strike by closing shops in protest against EFRIS. PHOTO/Michael Kakumirizi
Any estimated revenue lost throughout the protest by traders?
Sekitto: It is difficult to think of a specific amount incurred in losses. It is too early to have that assessment. For now, what you need to know is that each day the shop was closed simply translates into a loss in revenue among other things. Remember, the landlords will continue demanding for the days the shops were closed, no matter the cause. And for the tax collectors, I believe the opportunity to collect some taxes was missed as well.
Bbosa: No filing has been done yet, we can have these figures after 15th May.
Any takeaway from the meeting and the situation leading to this point?
Sekitto: We now know how much the President loves importers although he prioritises exports. We also got to know his respect for regional blocs and related agreements. We have also learnt that import trade is now more of a risky business. Importantly perhaps, we have already seen some of our members transitioning to export trade. Many of them have occupied Namanve business Industrial Park. We have also learnt from the President that if you do not think about value addition, there is no room for you in the government’s plans. Finally, we need easy access to the President just as Chinese investors seem to have.
Bbosa: It Is not ideal to handle matters in a confrontational way. It Is important to find solutions that benefit all parties involved to enhance the experience of traders using the EFRIS system and to make compliance easier. We will conduct deliberate onboarding and handholding sessions to train taxpayers on how to use the EFRIS system. We shall provide business support activities through workshops and seminars to bridge the knowledge gap for specific groups.
Based on feedback from the President, we are committed to deploying our teams more effectively during enforcement to avoid causing businesses inconvenience. Ultimately, we believe that no one should feel the burden of paying more than they are required to pay.
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