The Uganda Revenue Authority implemented the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) in July last year for what the taxman says all is intended to ease doing business. Jamil Senyonjo, Manager Taxpayer Literacy, Uganda revenue Authority talked to CEO East Africa Magazine and answered the Frequently Asked Questions about EFRIS.
Just briefly what is EFRIS and why did URA come up with the system?
EFRIS is an abbreviation for Electronic Fiscal Receipting and Invoicing Solution. This came into birth as a result of the various tax administration challenges that we experienced over time. The challenges included among others; complex administrative procedures, the huge informal sector, fictitious refund claims, illicit trade, unfair business competition, a narrow tax register, absence of sharing government data, and the missing trader invoice.
Considering the challenges above, a diagnosis of the Tax administration challenges was conducted under the Domestic resource mobilization strategy with the aim of maximising tax revenue (raising Tax to GDP ratio from 12.9% to between 16%-18%), improving taxpayer service, taxpayer education and reducing administration costs. Under the domestic resource mobilisation programme initiatives, we have a theme of improving our taxpaying culture and simplifying our processes. we have the digital tracking solution, we have an electronic fiscal receipting and invoicing solution and then e-tax 2.
EFRIS is a solution that is aimed at providing a third eye in any transaction; the first eye being the trader, the second eye being the seller, the third being the taxman. At the time of the transaction we want to be present, we want to restore the much-needed confidence and improve revenue administration. You will realise that some traders were using fictitious invoices, invoices that could not be traced to the seller, much as these invoices were being claimed by the buyers. Why EFRIS: we are saying if you did not recognise a transaction, this transaction will certainly not be considered for tax purposes. We aim at partnering with the business community and managing revenue administration, improve their records and accountability for tax purposes.
Why at this particular time?
We first had to make a diagnosis of the challenges that we had; after making a fair diagnosis then a prescription was designed and this prescription came in the form of EFRIS. Why now because whatever tasks that we administer are governed by legislation. So the law just came into place last financial year, we are good to go
How does the EFRIS system work, what’s involved?
This system works in such a way that you have to register as an authorized e-invoice system user with URA. After registering you stock in all the goods that you have at the time of registration. Then you can issue an electronic invoice to the client.The issued invoice from the taxpayer shall be authenticated before delivery to the client in an email, SMS or any other prescribed facility. Then the issued invoice which has been authenticated can now be declared and verified through our system for the tax returns or refund process. It is a management module to supervise and monitor the taxpayer e-invoice issuance declaration to prevent invoice forgery.
Who is eligible for the EFRIS and who is not?
We administer government revenue and we follow the laws that normally go through Parliament and assented to by His Excellency the President of the Republic of Uganda. The Commissioner-General may gazette taxpayers eligible for EFRIS. Currently, all Value Added Tax (VAT) registered taxpayers have been gazetted and are eligible for ERIS. other taxpayers may enroll, but it is mandatory for all VAT registered taxpayers.
Companies Rise or Fall on How Well They Renew Their LeadersHow would one benefit from using the EFRIS system, for those who are reluctant to implement it?
Being on the system will, first of all, reduce the cost of compliance and ease doing business through the following;
- A taxpayer is now able to track and validate business transactions in real-time for efficient business management. Like I also said before, you can take advantage of the prefilled tax returns and this minimizes delays and costs involved in filing tax returns.
- The time taken to verify refund claim has been reduced just in case you overpaid taxes.
- EFRIS also aids better record keeping; some people may not even be aware of the stock they have and the shop attendants may take advantage of this. But with EFRIS, at least you can monitor your stock against the sales.
Is there a deadline in place for the implementation of the EFRIS system?
As I said, All VAT registered taxpayers are required by law to enrol and account through EFRIS. But because of COVID-19 and other related challenges, we have relaxed our enforcement. We, first of all, want to be sure that everybody has been sensitised. We register them before enforcement. Otherwise all VAT-registered taxpayers are required to declare their business transactions through EFRIS.
Are there penalties for those who may not meet the deadline, and what are those penalties?
Certainly, there is a penalty for transacting outside ERFIS of 300 currency points, which translates to not less than UGX6 million since one currency point is equivalent to UX20,000.
Share some of the immediate benefits/and usage stats realised since EFRIS went into use at the beginning of the year?
We do periodical analysis and we are yet to conduct one. But because we have not started enforcing against non-compliance for EFRIS, we may not easily tell the impact of EFRIS now.
Any last message to the taxpayer as far as EFRIS is concerned
EFRIS is intended to ease the taxpayers’ way of doing business, you can now declare your business transactions through EFRIS you do not need to look for invoices, you do not need to go through the challenges of qualities of a tax invoice.Those who are doing good business for example those who are transacting with diplomats and government, you may not be able to break through unless you jump onto EFRIS. We implore our taxpayers to, first of all, ensure that they register, declare the right stock at the time of registration,and start transacting with URA through ERFIS.
