The media has been awash with stories of traders in downtown Kampala protesting against the implementation of URA’s Electronic Fiscal Receipting and Invoicing System (EFRIS) and what they allege as double taxation of Value Added Tax (VAT).

The traders claim that they pay VAT on goods while purchasing them from manufacturers or at importation and are still expected to remit another 18% to the tax body every month.

While appearing on the Capital Gang last Saturday, URA’s Commissioner General John Musinguzi demystified the claims, explaining that VAT is an indirect tax paid at every stage of value addition.

“What you pay to the government is the difference between VAT output collected at the selling point and VAT input at the buying point. VAT is one of those categories of taxes that fall under indirect taxes,” Musinguzi clarified.

This was echoed by Kira Municipality Member of Parliament Hon. Ibrahim Ssemujju Nganda, who explained that the ultimate bearers of the VAT burden are final consumers and not traders. He hinted that the opposition to EFRIS by traders could stem from the fear of losing customers due to increased prices.

“Traders do not pay but rather collect VAT. It is we, the final consumers, who pay the tax. Their only worry is that VAT will lead to an increase in prices, thus chasing away customers.” 

On EFRIS, Musinguzi explained that it is a system that facilitates the collection of VAT with a couple of benefits to the user, including improved bookkeeping and monitoring of sales and stock, among others.

He encouraged traders to adopt the technology, reiterating his readiness to review any operational concerns surrounding its implementation.

Hon. Abdul Katuntu, the Bugweri district MP, shared a similar sentiment, remarking that technological advancement is here to stay and Uganda cannot work backward.

“EFRIS is a tool for collection; it is not a tax. It has boarded and will remain. How to resolve the issues that arise from it is the conversation that URA needs to be having with traders,” said the honorable.

The show was graced by other “gangsters,” including Thadeus Musoke Nagenda, the chairman Kampala City Traders Association, veteran politician Lydia Wanyoto, and government spokesperson Ofwono Opondo.

By Joshua Niyonshima