Introduction

In accordance with Section 92(2) of the Tax Procedures Code Act Cap.343, all businesses operating within the specified sectors below were mandated to issue e-receipts or e-invoices effective 1st July 2025. This requirement applies irrespective of the business’s VAT registration status. 

 

Affected sectors/Business categories

  • Wholesale and retail of fuel: All fuel stations supplying kerosene and/or automotive fuels e.g. Diesel (AGO) and Petrol (PMS).
  • Water supply; sewerage, waste management, and remediation activities: This section includes activities of water supply and activities related to the management (including collection, treatment and disposal) of various forms of waste. It also includes solid or non-solid industrial or household waste, as well as contaminated sites.
  • Information, technology, and Communication: This sector includes the production and distribution of information and cultural products, the provision of the means to transmit or distribute these products, as well as data or communications, information technology activities and the processing of data and other information service activities.

    Exclusions: All non-resident digital service providers who are required to pay digital service tax are not mandated to use EFRIS.
  • Mining and quarrying: This includes the extraction of naturally occurring minerals in solid, liquid or gases. Extraction activities can be achieved by different methods such as underground or surface mining, well operations, seabed mining among others.
  • Construction: This sector includes general construction and specialized construction activities for buildings and civil engineering works. It covers new construction, repairs, renovations, extensions and the installation of prefabricated buildings and temporary structures.
  • Real estate activities: This sector includes those acting as lessors, agents and/or brokers in one or more of the following: selling or buying real estate, renting real estate, providing other real estate services such as appraising real estate or acting as real estate escrow agents.
  • Manufacturing: This includes the physical or chemical transformation of raw materials or intermediate goods into new products.
  • Transportation and storage: This sector includes the provision of passenger or freight transport, whether scheduled or not, by rail, pipeline, road, water or air and associated activities such as terminal and parking facilities, cargo handling, storage, postal and courier activities.

    Exclusions: For this phase of EFRIS rollout, all providers of passenger land transport are not mandated to use EFRIS. These include; taxis, boda-bodas, shuttles, buses, and other land transport.
  • Professional, scientific, and technical activities: This sector includes specialized professional, scientific and technical activities. These activities require a high degree of training and make specialized knowledge and skills available to users.
  • Electricity, gas, steam, and air conditioning supply: This sector includes the activity of providing electricity, natural gas and the like through a network of power lines, pipelines and other distribution systems.
  • Accommodation and food service activities: This sector includes those acting as lessors, agents and/or brokers in one or more of the following: selling or buying real estate, renting real estate, providing other real estate services such as appraising real estate or acting as real estate escrow agents.
  • Arts, entertainment, and recreation: This sector includes the provision of short stay accommodation for visitors and other travellers and the provision of complete meals and drinks fit for immediate consumption.
     

What does this mean for taxpayers?

Businesses in the listed sectors, regardless of whether they are VAT registered or not must ensure they are registered on URA’s e-invoicing system (EFRIS) or have URA-approved devices in place before 1st July 2025.

  • Failure to comply shall result in penalties under the Tax Procedures Code Act Cap.343.
  • No deductions shall be allowed for expenses incurred by taxpayers who purchase goods and services from suppliers that are designated to use the e-invoicing system unless the expenses are supported by e-invoices/e-receipts in accordance with Section 22(3)(m).
  • All e-invoices or e-receipts issued for business purposes should bear the buyer’s Business Registration Number (BRN), National Identification Number (NIN) or Taxpayer Identification Number (TIN).
     

Exceptions

Notwithstanding the above requirements, persons under the following categories are yet to be mandated to issue e-invoices or e-receipts through EFRIS for their business transactions, but they may do so voluntarily.

  • Small businesses in the above listed sectors with sales value (turnover) of less than UGX 10,000,000 per year; and
  • Taxpayers earning rental income less than UGX 2,820,000.
     

Caveat

This publication has been prepared by RSM Eastern Africa, and the views are those of the firm, independent of its directors, employees and associates. This publication is for general guidance, and does not constitute professional advice. Accordingly, RSM Eastern Africa, its directors, employees, associates and its agents accept no liability for the consequences of anyone acting, or refraining from acting, in reliance on the information contained herein or for any decision based on it. No part of the newsletter may be reproduced or published without prior written consent. RSM Eastern Africa is a member firm of RSM, a worldwide network of accounting and consulting firms. RSM does not offer professional services in its own name and each member firm of RSM is a legally separate and independent national firm.