The government has moved to amend the penalty structure governing the Electronic Fiscal Receipting and Invoicing System (EFRIS), scrapping the controversial Shs6M fine imposed on noncompliant taxpayers.
Instead, traders will now pay twice the amount of tax they owe in penalties.
The decision was announced by Henry Musasizi, Minister of State for Finance, during a meeting with Parliament’s Finance Committee.
The move comes after traders raised concerns that the blanket Shs6M fine per invoice unfairly burdened them, regardless of the transaction value.
EFRIS, which was introduced in 2021 as part of Uganda Revenue Authority’s (URA) digital tax compliance framework, was meant to enhance revenue collection by ensuring all businesses issue fiscalized receipts and invoices.
However, it became a subject of national controversy last year when traders protested against its penalties, arguing that they were too harsh and impractical.
The outcry led to multiple demonstrations across the country, with business owners demanding a review of the system.
Acknowledging these concerns, Minister Musasizi stated,
“Concerns have been raised regarding the high penalties of Shs6M per invoice, regardless of the value of the transaction, which disproportionately burden the taxpayers. To address this issue, we propose to amend the penalty structure so that the penalty for non-compliance will instead be twice the tax owed by the taxpayer.”
In addition to the EFRIS penalty amendment, the government has also proposed an import declaration fee on goods imported for home use, aimed at generating Shs79Bn to fund the construction of the Standard Gauge Railway (SGR).
“This measure seeks to raise revenue for infrastructure investment, particularly for the standard gauge railway, which is critical for Uganda’s trade competitiveness. In addition, it will render imports more expensive, hence promoting import substitution and supporting local industries. Furthermore, this proposal aligns with Uganda’s policy and other East African community partner states where similar fees are already imposed. For instance, Kenya apprised a 2% CIF charge, while Tanzania apprised a 0.6 customs processing fee,” explained Minister Musasizi.
