A receipt used to be the final step in a transaction: proof that money had changed hands, usually printed on paper and quickly forgotten.
That is changing in Uganda.
Today, a receipt can become part of a digital trail that gives the Uganda Revenue Authority (URA) a much clearer picture of how businesses sell, buy and operate. Through the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), transactions are increasingly being recorded electronically and transmitted to the tax authority in real time, under the legal authority of Section 73A of the Tax Procedures Code Act.
What began in January 2021 largely as a system for VAT-registered taxpayers is now reaching much further into the economy. In July 2025, URA issued General Notice No. 2218, published in the Uganda Gazette on 25 July 2025, expanding EFRIS requirements to non-VAT-registered taxpayers operating in 12 sectors, with effect applied retrospectively from 1 July 2025.
The significance is bigger than electronic receipts. EFRIS is changing how Uganda collects taxes by giving the tax authority greater visibility into commercial activity while making businesses more responsible for maintaining a verifiable digital record of their transactions.
The 12 sectors now under the spotlight
The expanded requirements cover businesses operating in:
- Real estate activities
- Wholesale and retail of fuel
- Mining and quarrying
- Manufacturing
- Electricity, gas, steam and air-conditioning supply
- Water supply, sewerage and waste management
- Construction
- Transportation and storage
- Accommodation and food services
- Information and communication technology
- Professional, scientific and technical activities
- Arts, entertainment and recreation
The important change is that VAT registration is no longer the only factor determining whether a business falls under the EFRIS requirements. Prior to 1 July 2025, only VAT-registered businesses, or those with annual turnover exceeding UGX 150 million, were required to issue electronic invoices. Under the new directive, businesses in the 12 gazetted sectors must comply regardless of VAT status.
URA has, however, built in relief for the very smallest operators. Businesses in the affected sectors with annual sales turnover below UGX 10 million are exempt from mandatory EFRIS use, as are taxpayers earning annual rental income below UGX 2.82 million. These exempted businesses may still adopt EFRIS voluntarily, at no cost, through the URA portal or EFRIS app.
For everyone else, the reach of EFRIS is considerably broader than many businesses may have assumed.
From tax returns to real-time visibility
The biggest change is not the receipt itself. It is what happens to the information behind it.
Under the traditional tax system, URA largely depended on businesses reporting their transactions through periodic tax returns. EFRIS creates a more continuous digital record of sales and invoices, generating a Fiscal Document Number (FDN) and QR code for every transaction so it can be authenticated in real time.
For the tax authority, that makes it considerably easier to identify discrepancies between reported sales, purchases and expenses.
For businesses, it changes what compliance means. Tax compliance is no longer simply a matter of preparing figures at the end of a reporting period. Businesses must increasingly ensure that their day-to-day transactions correspond with the digital records generated through the system. Because the mandate applies retrospectively, affected businesses are expected to have been compliant since 1 July 2025, not from whenever they first heard about it.
That has particular consequences for sectors where businesses have historically operated with less formal documentation.
The supply chain becomes an enforcement tool
Perhaps the most powerful part of the expansion is that URA does not have to rely entirely on direct enforcement. The system creates pressure through businesses themselves.
Where a business purchases goods or services from one of the gazetted sectors and does not receive a valid EFRIS invoice, the expense may become non-deductible for income-tax purposes. That marks a tightening from the previous regime, under which the Income Tax Act only barred deductions on purchases from suppliers without a Taxpayer Identification Number (TIN) once those expenses exceeded UGX 5 million. Now, the requirement for a valid e-invoice applies far more broadly across the gazetted sectors.
That creates a powerful incentive for companies to deal only with suppliers who can provide compliant documentation. A large company has little reason to keep working with a supplier that cannot issue a valid EFRIS invoice, and every e-invoice must also carry the buyer’s Business Registration Number (BRN), National Identification Number (NIN) or TIN, tightening the loop further.
The result is a form of indirect enforcement that ripples down the supply chain. A major corporation becomes more selective about its suppliers. A supplier that wants to retain corporate clients has a stronger reason to formalise. And the business further down the chain faces the same pressure in turn. EFRIS pushes compliance through the economy without URA having to physically monitor every transaction.
What the official numbers show
The expansion comes as Uganda pushes hard to widen its domestic revenue base. The official figures show why URA sees digital systems as central to that effort.
- FY 2024/25 revenue performance: URA collected net revenue of UGX 31.63 trillion against a target of UGX 31.37 trillion, a performance of 100.84%, and a surplus of UGX 262.43 billion. That represented growth of roughly 15.86% (about UGX 4.33 trillion) over the previous year, the authority’s first such surplus in a decade.
- Gross domestic revenue: Reached UGX 21.25 trillion against a target of UGX 21.11 trillion, a performance of 100.62%.
- Tax-to-GDP ratio: Tax collections have risen from roughly 13% of GDP to about 14.2%, a gain URA attributes partly to digital enforcement tools such as EFRIS and Digital Tax Stamps (DTS).
- FY 2025/26 target: The Ministry of Finance set URA a net revenue target of UGX 36.74 trillion, a 17.12% increase on the prior year, with a medium-term ambition of UGX 40 trillion beyond it. URA has acknowledged the 2025/26 financial year closed with a slight shortfall against that stretch target, even as overall collections continued to grow.
- EFRIS register: URA’s EFRIS register had already surpassed 64,000 taxpayers even before the 2025 sector expansion, with usage running as high as 83% among registered users at that time, a base the 12-sector mandate is now expanding sharply further.
For URA, the attraction of this data is straightforward: a digital record makes it far harder to understate sales or fabricate input VAT claims. The Ministry of Finance has previously estimated that revenue leakages closed by tools like EFRIS run into the trillions of shillings annually. But increased visibility also comes with real costs for the businesses generating that data.
The compliance burden
EFRIS requires more than simply pressing a button to print a digital receipt. Businesses may need compatible software, trained employees, reliable internet connectivity and functioning accounting systems. Compliance can be achieved through URA’s web portal, direct integration with a business’s accounting system, or an Electronic Fiscal Device (EFD) purchased from a URA-approved supplier.
Large companies can generally absorb these costs. For smaller businesses operating on narrow margins, the cost of technology, training and ongoing compliance can be far more significant, which is precisely why URA carved out the UGX 10 million turnover exemption for the smallest operators in the newly gazetted sectors.
This creates an important policy tension. The government wants more businesses to enter the formal economy and contribute to national revenue. But if compliance becomes too expensive or complicated even for those just above the exemption threshold, some small businesses may find formalisation harder rather than easier.
The question is not whether Uganda should digitise tax administration; that process is well underway. The more important question is whether the system can expand tax visibility without creating costs that discourage legitimate businesses from growing.
The cost of ignoring EFRIS
For businesses that fall within the requirements, non-compliance is expensive.
Under current guidance, failure by a gazetted taxpayer to adopt EFRIS can attract a penal tax equal to the tax due, or 400 currency points (UGX 8 million), whichever is higher. Failure to issue an electronic invoice or receipt can attract a penal tax equal to the tax due, or 300 currency points (UGX 6 million), whichever is higher. One currency point is currently valued at UGX 20,000.
Recent tax reforms approved by Parliament as part of the 2025/26 legislative changes also include a revision of EFRIS penalties, part of a broader package URA credits with improving compliance while aiming to create a fairer environment for business. The direction of travel is clear: Uganda’s digital approach to tax enforcement is becoming more central, not less.
The bigger transformation
EFRIS does not create a new tax. VAT remains the same consumption tax, and businesses continue to account for output and input VAT. What EFRIS changes is visibility.
The tax authority no longer has to depend entirely on a business telling it what happened during a reporting period. Increasingly, the transactions themselves generate a digital trail, a shift President Museveni has linked publicly to the government’s revenue and anti-corruption agenda, arguing that digital systems like EFRIS and DTS reduce discretion and opportunities for abuse in tax processes.
That is the real revolution. For businesses, the message is that tax compliance is becoming part of everyday operations rather than an exercise performed when a return is due. For URA, every invoice creates another piece of information that helps build a clearer, real-time picture of Uganda’s commercial economy.
And for the informal sector, the implications are even bigger. Businesses that once operated with minimal documentation may increasingly find that formalisation is necessary to retain customers, access larger companies, and remain competitive.
The receipt, in other words, is no longer simply proof that a customer has paid. It is becoming a data point in Uganda’s digital tax system.
And as EFRIS expands, with URA now chasing a UGX 36.74 trillion target this financial year and a UGX 40 trillion horizon beyond it, the taxman’s view of the economy is becoming increasingly detailed, one transaction at a time.
