URA tightens EFRIS rules, warns businesses over tax deductions
The tax authority has expanded mandatory use of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) to businesses operating in the targeted sectors, with the new requirements taking effect retrospectively from July 1, 2025.
URA has exempted some small businesses from mandatory EFRIS use.
Businesses in 12 major economic sectors risk losing income tax deductions if they fail to support their expenses with electronic invoices or receipts.
The warning follows an expansion of the Uganda Revenue Authority’s (URA) electronic invoicing requirements.
The tax authority has expanded mandatory use of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) to businesses operating in the targeted sectors, with the new requirements taking effect retrospectively from July 1, 2025.
Unlike the previous framework, which largely focused on VAT-registered taxpayers, the expanded mandate applies to businesses in the specified sectors regardless of their VAT registration status, subject to prescribed exemptions.
URA said in a public notice sent out on Monday, August 10, that the move is intended to strengthen the documentation of business transactions and improve tax compliance.
Tax deductions
Under the new requirements, business expenses will not qualify for income tax deductions unless they are supported by an official e-invoice or e-receipt.
The authority has also directed businesses to capture the identity of buyers on fiscal receipts issued for commercial transactions using a Taxpayer Identification Number (TIN), Business Registration Number (BRN) or National Identification Number (NIN).
12 sectors targeted
The expanded EFRIS mandate covers manufacturing, mining and quarrying, water supply and waste management, electricity and gas, construction, transportation and storage, accommodation and food services, information and communication technology, real estate, professional and technical services, arts and recreation, and wholesale and retail fuel businesses.
The fuel category covers petrol, diesel and kerosene stations.
In the transport sector, passenger land transport operators such as boda-bodas, taxis, buses and shuttles are excluded from the requirement.
Non-resident digital service providers subject to the Digital Service Tax are also excluded from the ICT category.
Small businesses exempted
Businesses operating in the specified sectors with annual turnover below sh10m are exempt, while taxpayers earning annual rental income of less than sh2.82m are also excluded.
The exempted businesses may, however, voluntarily adopt EFRIS.
About EFRIS
EFRIS is an electronic system used by URA to manage the issuance and validation of fiscal invoices and receipts.
When a transaction is processed through EFRIS, the relevant sales information is transmitted electronically to URA.
The system generates a Fiscal Document Number (FDN) and QR code for the invoice or receipt, enabling the transaction to be authenticated.
URA introduced EFRIS as part of efforts to improve tax administration, combat the use of false receipts and strengthen monitoring of business transactions.
The system became mandatory for VAT-registered taxpayers from January 1, 2021, before URA began expanding its application to other categories of taxpayers and businesses.