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URA Reports Shs 4 Trillion Lost Each Year

Uganda Revenue Authority (URA) Commissioner General John Musinguzi has revealed that the government loses revenue in the range of Shs4 trillion in uncollected taxes. He attributes this to the lack of capacity to monitor the level of transactions in businesses.

Musinguzi made these revelations while appearing before Parliament’s Committee of Commissions, Statutory Authorities and State Enterprises (COSASE) on Monday, 10th June.

Much as John Musinguzi and his fellow Commissioners had been summoned to address queries raised in the December 2023 Auditor General’s report, the committee asked them to expound on EFRIS.

“Would you like to use the platform of Parliament to tell us what EFRIS stands for and why it has become controversial lately? Why couldn’t this matter be resolved without escalating into a strike and involving the Head of State?” Medard Sseggona, Chairperson COSASE.

EFRIS, the Electronic Fiscal Receipting and Invoicing Solution, has dominated conversations in the public space over the last couple of months. This peaked when traders in Kampala closed their shops over what they called double taxation by the system meant to ensure real-time tracking of sales transactions.

However, Musinguzi explained that the rift with the traders was caused by the exorbitant penalties associated with the enforcement.

“The penalties for enforcement were quite high, so irrespective of what you are trying to sell without the E-receipt, the penalty was Shs6 million.” – John Musinguzi.

URA has since stopped issuing these penalties as a result of engagements and meetings that pulled in President Yoweri Museveni.

Musinguzi also confirmed that the authority has put enforcement on hold as they educate the traders on the system.

President Museveni also directed that penalties that had been issued to traders be waived.

VAT Concerns

Musinguzi is also concerned that after almost three decades of implementing the Value Added Tax, URA has only 32,000 taxpayers on the VAT register.

This is because a number of businesses claim to be below the Shs150 million per annum threshold required for voluntary registration on the VAT register. Mr. Musinguzi believes the implementation of EFRIS could go a long way in widening the VAT register. With EFRIS, the tax collector would have access to transactions by businesses hence ensuring real time tracking.

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