” LITIGATION ALERT (TORT) “
On 25 July 2025, the Commissioner General of the Uganda Revenue Authority (URA) through the legal mandate under the Tax Procedures Code Act, issued a Gazette Notice (General Notice No. 2218 of 2025) expanding the reach of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) to additional business sectors. The Notice for the identified business sectors is mandatory regardless of whether the taxpayer is VAT registered.
We note that this digital invoicing system is already compulsory for Value Added Tax (VAT) registered taxpayers since its inception in June 2020. The coverage of EFRIS has been substantially widened especially considering that it is not limited to Vat registered taxpayers and that professional services, as one of the sectors identified, is only generally mentioned.
By way of example, professional services, as one of the sectors identified, is only generally mentioned. According to URA’s Practice Note of 2002 a professional is defined to mean “a resident taxpayer who is in the business of providing medical, dental, architectural, engineering, accounting, legal or other professional services.”
Further, other professional services are defined to mean “persons belonging to a vocation or calling that involves some advanced learning or science with a minimum qualification of a Diploma or Degree or its equivalent.”
The range of professional services included is therefore extensive.
The new regime reinforces URA’s commitment to enhancing compliance and transparency in Uganda’s tax landscape.
What Businesses are affected?
From 1 July 2025, businesses operating in the following sectors are required to use URA- authenticated centralised invoicing and receipting systems to issue electronic invoices or receipts under EFRIS;
1. Wholesale and retail of fuel;
2. Mining and quarrying;
3. Manufacturing;
4. Businesses supplying electricity, gas, steam, and air conditioning;
5. Those involved in water supply, sewerage, waste management, and remediation activities;
6. Construction;
7. Transportation and storage;
8. Accommodation and food service activities;
9. Providers in information, communication, and technology services;
10. Real estate activities;
11. Professional, scientific, and technical activities; and,
12. Arts, entertainment, and recreation sectors.
This expansion builds on the 2020 mandate requiring all VAT-registered entities to issue electronic invoices or receipts using EFRIS, aligning with URA’s digitalization strategy aimed at closing tax gaps and improving revenue collection.
Understanding EFRIS
EFRIS was introduced in 2020 to replace traditional paper invoicing with an electronic system that transmits transaction data to URA in real time. This followed wide spread VAT invoice trading where many taxpayers sometimes exploited a gap and sold tax invoices to reduce VAT laibilities and denying URA the due collections.
This innovation reduced errors and fraud, simplified auditing, and increased transparency. The EFRIS system integrates with point-of-sale or accounting software, enabling automatic issuance of electronic fiscal documents that serve as legally recognized proof of transactions.
Although the Notice was issued on July 25 2025, the listed business sectors were expected to comply retrospectively from 1 July 2025.
Compliance requirements for Taxpayers
Affected businesses must integrate their accounting or sales systems with EFRIS for seamless e-invoice and e-receipt issuance.
They must also train staff to effectively use the EFRIS system and maintain accurate, verifiable digital transaction records according to URA standards. Further, businesses need to ensure all invoices and receipts issued to customers comply with EFRIS specifications.
Penalties for non-compliance
The Tax Procedures Code Act imposes strict penalties for failure to comply, including fines equal to double the tax due on any goods or services invoiced without using EFRIS-compliant electronic fiscal devices.
Any VAT registered businesses that purchase goods or services from suppliers in the above-mentioned sectors shall only be allowed input credit on such expenses if the transaction is supported by an e-invoice or e-receipt.
Additionally, expenses lacking proper e-invoices or e-receipts are not considered as allowable deductions for tax purposes where the suppliers claiming these deductions are mandated to use EFRIS but failed to comply.
E-Invoices, E-Receipts Vs Registration thresholds
EFRIS encompasses two components: e-invoicing and e-receipting.
VAT-registered taxpayers; those with a turnover of UGX 150,000,000 or more, are required to issue e-invoices. Non-VAT registered taxpayers are obligated to issue e-receipts. Both serve as official records evidencing taxable transactions undertaken through EFRIS, extending the system’s scope beyond VAT-qualifying entities.
The current Notice appears to provide for a mandatory regime for e-invoices or e-receipts regardless of the VAT threshold and registration requirements. It mandates that taxpayers in 12 specified sectors issue e-invoices or e-receipts, as applicable, for all transactions they undertake.
The law empowers the Commissioner to designate specific taxpayers required to issue e-invoices, e-receipts, or use electronic fiscal devices. The current Notice has listed the sectors generally. It has not created specific categories or stated any thresholds or exclusions.
A more effective approach could involve clearly delineating sectors based on whether they meet the e-invoicing or e-receipting thresholds, providing tailored guidance for compliance by these sectors. We anticipate that the URA will issue further clarification to address the ambiguities created by the Notice and streamline adherence to the EFRIS framework.
Conclusion
The expansion of EFRIS to cover a wide spectrum of business sectors is a pivotal move toward a fully digital tax administration in Uganda, underscoring URA’s dedication to transparency and fiscal discipline. However, significant efforts are still needed to ensure a seamless transition.
Compliance with the Notice presents substantial challenges, as businesses must integrate systems with EFRIS, train staff, and adhere to strict requirements to avoid penalties and maintain credibility within Uganda’s evolving tax framework.
To bridge these gaps, URA should intensify its focus on comprehensive taxpayer education, meaningful stakeholder engagement, and precise guidance on sector-specific obligations.
Disclaimer:
This publication is for general consumption and should not be taken and relied upon without seeking specific legal advice on any of the matters above.