KAMPALA, UGANDA – The Uganda Revenue Authority (URA) has significantly expanded the scope of its Electronic Fiscal Receipting and Invoicing Solution (EFRIS) to 12 new business sectors, a major move aimed at enhancing tax compliance and formalizing the country’s economy. The directive, which took effect on July 1, 2025, requires businesses in these sectors to issue electronic invoices and receipts regardless of their Value Added Tax (VAT) registration status.
The URA’s decision, outlined in General Notice No. 2218 of 2025, extends the EFRIS mandate beyond just VAT-registered businesses to industries that have historically been prone to under-reporting. The newly included sectors are:
- Wholesale and Retail of Fuel ⛽️
- Mining and Quarrying
- Manufacturing
- Electricity, Gas, Steam, and Air Conditioning Supply
- Water Supply; Sewerage, Waste Management and Remediation Activities
- Construction 🏗️
- Transportation and Storage
- Accommodation and Food Service Activities 🏨
- Information and Communication Technology (ICT)
- Real Estate Activities 🏡
- Professional, Scientific and Technical Activities
- Arts, Entertainment and Recreation
This expansion is a strategic effort to widen the tax base and increase transparency. By requiring all transactions in these sectors to be recorded in real-time and shared directly with the URA, the tax body aims to reduce revenue leakage and ensure a more equitable contribution to national revenue.
Penalties and Enforcement
The URA has stated that it will enforce compliance with strict penalties. Businesses that fail to issue an EFRIS invoice or receipt will be subject to a penal tax equal to double the amount of tax due on the goods or services. Additionally, for non-VAT registered businesses, non-compliance could lead to fines of up to UGX 30 million or imprisonment.
A crucial aspect of this new enforcement is the burden placed on the customer. Expenses incurred by customers in any of the 12 sectors that are not supported by an EFRIS invoice will be disallowed for income tax purposes, creating a dual accountability system where both the supplier and the buyer are incentivized to ensure compliance.
Challenges and Outlook
While the URA has emphasized the long-term benefits of EFRIS, including streamlined tax returns and improved record-keeping, the expansion presents significant challenges for many businesses. Small and medium enterprises (SMEs) in particular may struggle with the costs of implementation, including purchasing fiscal devices, ensuring a stable internet connection, and training staff.
The URA is actively encouraging businesses to adopt EFRIS to avoid penalties. The expansion is viewed as a clear signal of the government’s commitment to modernizing its tax administration and is likely to be a precursor to including more sectors in the future.
