Companies will not get tax refunds without E-receipts from October – URA

Kampala, Uganda |  THE INDEPENDENT |  Taxpayers who will want to claim a tax refund from Uganda Revenue Authority – URA will not be allowed if they don’t implement the electronic invoice and receipt system.

According to URA, taxpayers have three months up to September 30, 2020, to adjust their systems and start issuing e-invoices. 

From 1 October 2020, no taxpayer will claim a tax credit if they didn’t issue e-invoices in their trading. The program is implemented under the Electronic Fiscal Receipting and Invoicing Solutions (EFRIS).

Presenting to auditors at PricewaterhouseCoopers (PWC) on Thursday, Hassan Wassajja, an official at URA, said the e-invoice helps the tax body see transactions in real-time. Every time a product is sold at a supermarket or sold and the receipt is issued, that information is sent directly to the URA system.

This will help URA catch tax cheats that have been under declaring their sales to avoid tax. 

URA charges 18% Value Added Tax on production at every stage of a product passes. However, the final bearer of this tax is a consumer and the business owner gets a refund.

URA now says without an e-invoice from October, no one will be allowed a refund. Money refunded to businesses is important for their cashflow and help in their operations.

This month, High Court dismissed an application by several supermarkets seeking to block the pilot roll-out of electronic receipts and invoice.

“The e-receipts that will be issued will have a fiscal document number, which is the URA invoice number. This number must be quoted for one to claim a refund,” said Wassajja.

Wassajja said businesses will have to use software supplied by approved suppliers but the cost will have to be met by the business. However, he said, this is the cost that is tax-deductible when the business if filing its tax returns.

PWC said in a note to clients that “in addition to the compliance aspects, claimed benefits for the system include the ability for purchasers to check the validity of documents in real-time and simplifying the preparation of VAT returns.”

Currently, when one asks for a VAT refund, URA institutes an audit before the refund to weed out fictitious claims.

Wassajja said e-invoices will allow easy reconciliation because URA will already be having the information through real-time transmission every time a transaction takes place.

URA has started training business owners on the issuance of e-invoices. They will also be helped to install the software to issue e-receipts that will go on until the end of September.

Vincent Seruma, the URA commissioner for corporate affairs said they expected businesses to be ready for the system in the next three months.

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URN