Uganda losing Shs4tn in uncollected VAT - Musinguzi

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Uganda losing Shs4tn in uncollected VAT - Musinguzi
URA chief Musinguzi has defended the operationalisation of Efris

The Commissioner General of Uganda Revenue Authority (URA), John Musinguzi has come to the defense of the Electronic Fiscal Receipting and Invoicing System (EFRIS), stating that Uganda has been experiencing annual losses of Shs4 trillion to uncollected Value Added Tax (VAT).

He emphasised that the implementation of this new system will ensure that all VAT taxpayers contribute their fair share of taxes.

He made the remarks while speaking before the Committee of Commissions, Statutory Authorities and State Enterprises (COSASE) on Monday, regarding concerns raised in the December 2023 Auditor General's report.

It should be recalled that the recent introduction of EFRIS caused disruptions in business operations in Kampala, prompting traders to close shops in protest against the system.

During the committee session, Busiro East MP Medard Sseggona questioned the Commissioner General about the negative impact of EFRIS on the business community and the ‘embarrassing’ standoff between President Yoweri Museveni and traders at Kololo.

“I know you have been grappling with the issue of Electronic Fiscal Receipting and Invoicing System (EFRIS) and you know how far it has stretched us including attracting a major standoff between URA and our major collection points, the traders,” Ssegona said.

In response, Musinguzi explained that the initial tough penalties associated with EFRIS enforcement led to resistance from traders.

“The penalties for enforcement were quite high, so irrespective of what you are trying to sell without the E-receipt, the penalty was Shs6M. So I think, the toughness in the penalty and the toughness in the enforcement campaign caused this,” Misinguzi said.

However, he said URA has since waived these penalties and shifted focus to educating and sensitising traders nationwide about EFRIS.

Musinguzi, also highlighted that opposition to EFRIS is not unique to Uganda, citing similar resistance in Tanzania and Rwanda when these countries implemented the system.

“We have also checked the trends of all countries that have adopted this technology, especially within our environment-the East African Community,” Musinguzi said.

"Tanzania has been using the same technology for more than 19years, Rwanda has been using the same system for more than 10years, even Kenya. When you are starting, there is always resistance, closure of businesses, there are standoffs, but as we explain and engage home, people understand that this system is good for them, it is good for the Government.”

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