Uganda Revenue Authority has expanded mandatory use of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) to manufacturers, miners, real estate firms, hotels, fuel stations, construction companies and other sectors, widening the digital tax net beyond value added tax (VAT)-registered taxpayers.
In a public notice published, URA said the requirement has already taken effect, beginning from July 1, and is additional to the existing EFRIS obligation for all VAT-registered taxpayers.
The directive covers 12 broad sectors that transact extensively with consumers, businesses and government.
The sectors include manufacturing; mining and quarrying; water supply, sewerage and waste management; electricity, gas, steam and air-conditioning supply; construction; transport and storage; accommodation and food services; information and communication; real estate; professional, scientific and technical activities; arts, entertainment and recreation; and fuel retailing.
Passenger land transport providers, including taxis, boda-bodas, shuttles and buses, are excluded from this phase. Non-resident digital service providers already paying digital service tax are also excluded.
URA also provided relief for micro operators. Businesses in the listed sectors with annual turnover below Shs10m and taxpayers earning rental income below Shs2.82m annually are not required to issue electronic invoices or receipts, although they may use EFRIS voluntarily.
URA has also tightened documentation requirements. E-invoices and e-receipts issued for business purposes should carry the buyer’s Business Registration Number, National Identification Number or Taxpayer Identification Number.
In addition, businesses will not be allowed an income tax deduction for an expense unsupported by an electronic invoice or receipt where the supplier is required to use EFRIS.
Simon Kaheru, the East African Business Council Uganda Chapter chairperson, said expanding the tax base and strengthening compliance could reduce pressure on businesses that already meet their obligations while encouraging greater formalisation.
‘It is always good and sensible when governments widen the tax base and compliance measures,’ he said, noting: ‘That decreases the burden on the more compliant and also creates the atmosphere for more formality in business arrangements.’
He said reducing the informal economy should produce wider economic benefits, but warned that implementation must combine awareness with appropriate enforcement.
‘Decreasing the share of the informal economy will generally benefit us all from a macro-economic perspective,’ he said.
‘Now what we need is the right level of education or information building, along with appropriate enforcement that is not punitive but enhances the benefits of this formality.’
Kaheru added that EFRIS should not be treated as a stand-alone answer to tax administration challenges, but as one component of a broader digital infrastructure.
‘Overall, EFRIS is not a solution on its own but is part of a digital eco-system that should run like a machine with different parts all producing a result that works for us as an economy,’ he said. ‘There are still parts of this digital eco-system that are yet to be put to proper use, and we hope the government addresses this soon.’
Fuel industry players have also welcomed the expansion, saying it could create a more level playing field in a sector where cash transactions can be difficult to track.
Peter Ochieng, a regional oil marketing expert, said broader compliance could help prevent repeated tax increases on businesses that already pay their share.
He said fiscal receipts would also make it easier for motorists and companies to document fuel expenses for tax purposes.
Ochieng said mandatory electronic receipting could push oil marketing companies to compete more on customer service and other offerings rather than gaining an advantage through weak tax compliance.
He also pointed to real-time reporting as a way of improving accountability and reducing disputes between businesses and revenue authorities.
However, he said fuel retailers will need to invest in technology capable of issuing receipts during fueling and train pump attendants to operate the systems.
Similar technology is already used at service stations in Kenya, he said. Small-business representatives are more cautious about the compliance costs.
John Walugembe, Executive Director of the Federation of Small Scale Association of Uganda, said extending EFRIS to utilities and other sectors would give URA greater visibility over transactions and make it harder for taxpayers to under-declare income.
He said information from services such as water, sewerage and electricity could strengthen URA’s ability to compare consumption and transaction data with declarations. That could improve revenue collection, but it could also increase the cost and complexity of compliance for smaller enterprises.
Walugembe urged URA to provide targeted education, simplified tools and practical support before stepping up enforcement, warning that small firms may otherwise incur penalties because they lack the necessary devices or knowledge.
The concern echoes Kaheru’s call for enforcement that encourages businesses into the formal economy rather than punishing them before they understand the new requirements.
For affected companies, the immediate priorities are registration, staff training and system integration. Businesses with high transaction volumes, including hotels and fuel stations, may need point-of-sale integration, while construction and real estate companies handling large or irregular invoices will have to ensure their billing processes meet EFRIS requirements.
URA says taxpayers needing assistance can access resources through its portal.
The expansion marks another step in URA’s effort to deepen Uganda’s digital audit trail. Electronic invoicing is intended to reduce under-declaration, improve transaction traceability and strengthen documentation for tax claims.
The wider EFRIS net promises better visibility and potentially stronger collections for government. While for businesses, its success will depend on whether the technology works as part of a coherent digital system, and whether implementation balances enforcement with education, affordability and practical support.
The policy places technology at the centre of URA’s strategy to broaden compliance and improve revenue administration.
As more sectors enter the system, the central test will be whether EFRIS can bring more economic activity into the formal tax framework without creating barriers that discourage smaller businesses from formalising.