Museveni dashes traders’ hopes on EFRIS

President Museveni has upheld the full implementation of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), dashing traders’ hopes of a complete scrapping of the system that is used by the Uganda Revenue Authority (URA) to levy Value Added Tax (VAT).

Addressing Kampala traders during an open-air session at Kololo independence grounds on Tuesday, the President said EFRIS is an enabler of the government’s efforts to wean itself from foreign borrowing to fund its budget.

The traders associations are opposed to EFRIS, which they say is cumbersome during implementation and it comes with heavy penalties when a mistake is made.

However, on Tuesday, the President ordered URA not to emphasise on traders buying the EFRIS gadget.

“I saw the EFRIS machine myself and I tried to use it. I think you can learn how to use it. But if you don’t want to use it, they say you can use your smart phone. You don’t have to buy an Efris machine of Shs6 million. What’s the cost of a smartphone!? You can use a smart phone and buy a printer of Shs150, 000 to attach to it. Therefore, I direct URA not to insist on EFRIS machine. The ones who can buy it let them buy, but those who can’t afford it should use alternative means. There should not be any penalties for not buying an EFRIS machines,” he said.

He also called on the business community to support national development by embracing taxation and import substitution.

“The issue is not whether we should pay the tax but when we should pay the tax. Now I would like to have flexibility, that if you can pay cash, pay. If you can’t pay later. Now what if the goods don’t get sold? I would like your leaders to sit with URA people and fine-tune that part and I can entertain you here on June 20, 2024 to tell us how they have fine-tuned that,” he directed.

Mr Museveni also said VAT is intended to fight imports.

“You talked about VAT. I have studied it and I don’t see the danger of VAT because of our big aims as a country and I have shown you that Uganda can stand on its own. I have given you the example of milk, cement, steel bars etc. You can see where we have been able to stand on our own without importing. Therefore, this tax which is partly concentrating on the narrow spectrum of imported products should not be opposed. You would be wrong if you opposed such a tax (VAT),” the President said.

One of the traders’ claims was that the government is doing nothing to protect local investors since it allows several foreign investors to start small-scale businesses in downtown Kampala and other parts of the city, which should be a preserve of the former.

But the President rejected the assertion.

“You say government doesn’t support local investors. That’s rubbish! We have 450 companies in Namanve. 315 of them are Ugandan; that’s about 70%. I told your leaders to stop importing since they had amassed enough wealth to start their own factories here. You said you had issues with acquiring land. Who frustrated you from acquiring land? You will need to tell us. You should stop that language [of demonizing foreign investors]. You talk like enemies of Uganda. The challenge we have is patriotism. There’s a Chinese who set up a factory in Kapeeka to make tiles. Intially, we used to import tiles. Some of your leaders like Issa Ssekito started cursing him. But his factory helped stop bleeding our economy through imported tiles,” he said.

It remains to be seen if traders will call off their strike and fully reopen their businesses. During the President’s speech, some traders were seen chuckling in disapproval of some of his remarks, while others walked out before the end of the function.