KAMPALA —City lawyer Hassan Male Mabirizi has filed an application with the Tax Appeals Tribunal, seeking a permanent injunction to stop the Uganda Revenue Authority (URA) from enforcing the mandatory use of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) on traders and business people.
Mabirizi argues that the introduction of EFRIS is unlawful and contradicts the Value Added Tax Act and Income Tax Act. He claims that the system forces traders and business people to register for VAT, even if they are not qualified, and makes them withholding agents, contrary to the Income Tax Act. This, he says, is an unnecessary burden on small businesses and traders who are already struggling to comply with the complex tax laws.
Additionally, Mabirizi points out that the system requires traders and businessmen to purchase EFRIS Point of Sale Machines at a cost of Ugx 1,000,000 from URA’s monopoly supplier, which goes against taxation principles. He argues that this is an unfair and excessive requirement, as many businesses cannot afford the machines.
Mabirizi also argues that EFRIS exposes the public to arrests, as URA enforcement officers demand EFRIS receipts from goods carriers and mount roadblocks to enforce compliance. He claims that this is a violation of the public’s rights, as people are being detained and fined for not having receipts that they are not legally required to have.
Mabirizi is seeking an order to nullify and set aside all actions, fees, penalties, and enforcement of mandatory EFRIS usage and application to traders and business people. He also seeks general, aggravated, and exemplary damages for the disturbance and anguish caused by URA’s actions.
The application was filed on Wednesday, April 17, 2024, and URA has already been served with a copy. This development comes as shops in Kampala, Masaka, Mubende, and other parts of the country remain closed in protest against the EFRIS policy, which business people claim is unfair to them.
The Tax Appeals Tribunal is expected to hear the application and make a ruling on the matter, which could have significant implications for URA’s enforcement of EFRIS and the business community’s compliance with the system. If the tribunal rules in favor of Mabirizi, it could mean a reprieve for traders and business people who have been struggling to comply with the EFRIS requirements.
The case has sparked widespread interest, with many business people and traders eagerly awaiting the outcome. The Uganda Revenue Authority has yet to comment on the matter, but it is expected to vigorously defend its implementation of EFRIS.
In the meantime, the business community remains divided, with some supporting the EFRIS system as a necessary measure to combat tax evasion, while others see it as an unfair burden that will drive them out of business. The outcome of this case will likely have a significant impact on the direction of tax policy in Uganda.
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