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Joshua Kato

G4S Secure Solutions (Uganda) Ltd v Uganda Revenue Authority, TAT No 98 of 2024

They say no good deed goes unpunished, and in Uganda’s tax world, that saying might just have a URA stamp on it.

Picture this: An HR manager beams proudly as she shares a report, “We’ve improved staff welfare this quarter. Meals are now free for everyone!” Applause fills the room. After all, feeding employees feels noble, almost moral, a sign that the company values people beyond profit.

To most executives, it’s an act of fairness. But to the taxman, fairness sometimes comes with a price tag. One bright morning, a letter lands on the HR desk, “PAYE Assessment Notice.” Suddenly, the fairytale turns into a tax tale. The villain? Not greed or fraud, but generosity itself.

And that&rsquo;s exactly what happened in the famous G4S Secure Solutions (Uganda) Ltd v Uganda Revenue Authority, Tax Appeals Tribunal Application No. 98 of 2024, decided on 13th October 2025. What began as an act of staff welfare soon became one of Uganda&rsquo;s most defining PAYE cases, redrawing the line between kindness and compliance.

Employee welfare, by its everyday meaning, embodies care, meals, housing, transport, insurance, and comfort offered to make the workplace humane.

But in the tax world, “welfare” isn’t judged by kindness; it’s judged by benefit. The moment a welfare item can be valued, enjoyed, or confined to certain staff, it tiptoes into the taxable zone of non-cash benefits.

In G4S’s case, the company provided meals to its guards and staff, seemingly fair, since it was part of promoting equality and staff morale. But URA disagreed.

Their argument was simple yet piercing: if one employee gets more or better meals than another, the principle of equal treatment collapses, and where fairness ends, taxation begins.

Behind this dispute lies a deeper struggle faced by hundreds of Ugandan companies that I have come across, from security firms and manufacturing plants to banks and NGOs.

Every year, they invest millions in staff welfare, lunches, fuel allowances, medical care, school fees, or accommodation, only to later face PAYE assessments claiming these were taxable benefits in disguise. URA’s lens is sharp: if a benefit is selective, quantifiable, or exclusive, it falls under the tax net.

Yet, many employers plead that their intentions were pure. They didn&rsquo;t enrich employees; they simply leveled the field. But as the G4S ruling now clarifies, fairness in taxation is not about intent, it&rsquo;s about uniformity. A welfare benefit becomes taxable the moment it fails the equality test.

And that’s the tie-breaking rule the court illuminated: “True fairness under tax law is not what a company feels is fair, but what is equally accessible and quantifiable to every employee under similar terms”.

The case arose from a PAYE assessment issued by URA on what it termed non-cash employment benefits provided by G4S to its employees. G4S, one of Uganda’s largest security companies, employed thousands of guards deployed at various client sites across the country.

As part of its staff welfare policy, the company provided meals to guards during working hours, particularly those on long or night shifts. According to G4S, this was a measure to ensure efficiency, safety, and staff morale, not a reward or an additional income.

However, during a routine PAYE audit, URA discovered inconsistencies in how the meals were provided. Some guards received meals of higher value depending on their deployment sites, while others were given meal allowances instead of physical meals. In certain locations, no meals were provided at all.

URA took the position that this inconsistency created a taxable differential benefit, effectively, an income in kind subject to Pay As You Earn (PAYE) under Section 19(1)(a) of the Income Tax Act (Cap. 340). Consequently, URA issued an assessment to G4S for unpaid PAYE, arguing that the company had extended a non-cash employment benefit that must be taxed.

The main question for determination was: Whether the meals provided by G4S to its employees constituted a taxable benefit under the Income Tax Act. In simpler terms: was this welfare or was it income?

G4S maintained that the meals were operationally necessary, not part of remuneration but an expense to facilitate the nature of their guards’ work, many of whom could not leave their stations during shifts. They argued that the provision of meals was uniform in spirit, even if execution differed slightly across sites due to logistical and client variations.

URA countered that tax law does not test spirit, it tests equality and value. Since not every employee received the same or equivalent meal benefit, fairness under tax law was broken.

In defence, G4S argued that the meals provided to its security guards and staff were purely a welfare measure aimed at promoting efficiency and discipline rather than a form of remuneration.

The company maintained that these meals were operational necessities, not benefits of monetary value or personal enrichment. According to G4S, Section 19(1)(a) of the Income Tax Act applies only to benefits derived directly from employment contracts, whereas the meals were incidental facilities meant to support the nature of their work, not contractual entitlements.

URA countered that the meals qualified as benefits in kind, as employees clearly derived personal value from consuming them. Citing the Income Tax (Employment Income) Regulations, URA argued that any non-cash advantage with an ascertainable value falls within taxable employment income.

Furthermore, because the meals were not provided uniformly, with some employees receiving more or better meals than others, URA contended that the benefit became selective and therefore taxable under PAYE.

In its ruling delivered on TAT upheld URA’s position, holding that the meals provided by G4S Secure Solutions (Uganda) Ltd constituted taxable employment income within the meaning of Section 19(1)(a) of the Income Tax Act.

The Tribunal found that the welfare policy was applied inconsistently, some employees received meals of varying quality while others received cash allowances or none at all, creating unequal treatment that converted the welfare initiative into a quantifiable non-cash benefit.

It emphasized that an employer’s good intentions cannot override statutory interpretation, stating that fairness in taxation is not subjective but measurable in uniformity and value. Consequently, the Tribunal upheld URA’s PAYE assessment and directed G4S to account for tax on the meals provided during the audit period.

The G4S ruling firmly established what tax practitioners now call the &ldquo;Equality Test&rdquo; in Uganda&rsquo;s PAYE jurisprudence. Under this principle:

A welfare benefit is taxable if it is not available to all employees on equal terms and quantifiable value.

Employer intention (such as boosting morale or efficiency) is irrelevant if the outcome creates disparity.

Operational necessity does not exempt a benefit from tax if it confers measurable personal advantage.

This ruling has since become the reference point for interpreting Section 19(1)(a), redefining how companies handle meals, allowances, housing, and other welfare initiatives.

The G4S v URA decision now stands as a cautionary tale for employers across all sectors, security firms, manufacturing plants, banks, NGOs, and even government projects. It teaches that in the realm of tax, fairness is mathematical, not emotional. Every welfare policy must now pass two critical tests:

<ul><li>Is it available to all employees in similar roles?</li><li>Can its value be objectively measured or justified?</li></ul>

If the answer to both is yes, it’s likely safe from PAYE. If no, it’s likely taxable.

As a tax practitioner, the G4S ruling offers three critical takeaways for employers and tax practitioners: welfare initiatives must be clearly anchored in written policy rather than goodwill, fairness should be routinely audited to ensure consistent treatment of employees, and proactive consultation with tax advisors is essential, because preventing PAYE exposure is far less costly than defending assessments.

For the employees of G4S, this decision is more than a legal outcome, it’s a landmark recognition that their welfare story has reshaped national tax thinking. Congratulations! You have redefined fairness for every employee in Uganda.

The writer is a chartered Accountant and a Chartered Tax Advisor

The case arose from a PAYE assessment issued by URA on what it termed non-cash employment benefits provided by G4S to its employees.

When employee welfare crosses the tax line: The G4S fairness lesson

Every October, something interesting happens in Uganda. Offices close, streets fill with flags, and everyone suddenly becomes a historian.

Some remember where they were when Uganda won her freedom, others just remember it’s a public holiday. While some people use the day to reflect deeply, others use it to roast meat, catch up on sleep, or check which supermarket is giving “Independence offers.”

Yet beneath all that colour and celebration lies a quiet truth, Independence Day is not just about speeches and parades. It’s about endurance.

It’s about a people who, 63 years later, continue to finance and defend their freedom in ways that rarely make the news.

When Uganda gained independence in 1962, the excitement was electric.

For the first time, Ugandans could imagine running their own economy, passing their own laws, and directing their own future. But freedom did not begin with fireworks, it began with taxes.

Before independence, colonial taxes were harsh and strategic. There was the hut tax, the poll tax, and graduated tax, each designed to extract revenue and enforce control.

Taxes were not about building Uganda; they were about financing the colonial administration and forcing Africans into the cash economy. People paid, often unwillingly, but they learned one enduring lesson: that taxation is power. Whoever controls tax, controls destiny.

After independence, Uganda’s taxation evolved with its story. The early years saw efforts to organize a national tax system, later disrupted by wars and economic collapse. By the late 1980s, when the Uganda Revenue Authority (URA) was established, the country was ready to rebuild its fiscal discipline.

Today, our tax landscape has grown remarkably sophisticated. We have PAYE for employees, corporation tax for companies, VAT on consumption, customs duties on imports, and excise duty on goods like fuel and alcohol.

There’s withholding tax, rental income tax, and even digital service tax for the online economy. Whether you’re a teacher, truck driver, techpreneur, or trader, you are part of Uganda’s revenue engine.

And that is the hidden power of our independence every citizen plays a role. For 63 years, Uganda’s progress has not only been built by the military, politicians, and visible faces of leadership.

It has also been shaped by millions of silent patriots: the civil servants who file returns faithfully, the entrepreneurs who pay URA without complaint, the accountants who insist on compliance, and the citizens who resist corruption even when it’s easier to look away.

These are Uganda’s unsung freedom fighters! Those who defend the country through honesty, productivity, and responsibility. Their contribution is the reason Uganda stands firm, year after year, balancing its books and its hope.

Indeed, independence is not just about what was won in 1962. It is about what has been sustained since then, the taxes that keep our soldiers paid, our children in school, and our hospitals running. It is about civic duty turned into nation-building.

One cannot speak of modern Uganda without acknowledging the role of stability. For nearly four decades, the National Resistance Movement (NRM) government has provided a relatively peaceful environment where businesses can grow, farmers can trade, and investors can plan with confidence.

Irrespective of religion, tribe, or political affiliation, Ugandans have enjoyed the freedom to live, work, and dream in peace. That peace has been the soil in which our tax system has flourished. Without it, compliance would be impossible, investment unthinkable, and independence unsustainable.

For that, Ugandans owe appreciation to a government that has maintained security and built systems where taxes translate into visible growth, roads, power lines, schools, and hospitals across the nation.

Of course, challenges remain. The informal sector still hides vast untapped potential. Tax evasion, corruption, and weak accountability occasionally blur the public’s trust. But even then, the progress is undeniable.

From 1962’s uncertain start to today’s robust revenue authority, Uganda has moved from a country that was taxed by others to one that proudly funds its own future.

The next phase of independence demands more than celebration, it demands participation. Every Ugandan, whether in business, employment, or the informal trade, has a civic role in sustaining this freedom. Paying taxes should no longer be seen as a burden, but as a patriotic act. It is how we keep our flag flying, our roads smooth, and our children hopeful.

So, as we mark 63 years of independence, let us toast not only to our founding heroes but also to the unsung citizens, the compliant taxpayer, the honest auditor, the transparent civil servant, and the ethical leader. They are the quiet engines behind Uganda’s enduring freedom.

Because in truth, the independence we celebrate today is not just a memory of 1962, but rather a living achievement financed by Ugandans themselves.

Happy 63rd Independence, Uganda — the land financed, built, and protected by her own.

The writer is a Chartered Accountant, A tax Advisor and a business analyst.

For that, Ugandans owe appreciation to a government that has maintained security and built systems where taxes translate into visible growth, roads, power lines, schools, and hospitals across the nation.

How Uganda’s freedom is financed

Every morning as I drive to work along Kyanja Road, I pass a line of forex bureaus. Their bright digital boards flash new figures each day, green for buying, red for selling.

A few weeks back, I would glance up and see the dollar trading at around UGX 3,740. But with time, the numbers began falling silently. From 3,740 to 3,700, then 3,650, and now hovering around UGX 3,450.

At first, I didn’t think much of it. The change felt gradual, almost unnoticeable. But one morning, it struck me, the U.S. dollar, that long-dominant currency, was losing ground to our shilling faster than most people realize.

And yet, as I sat in traffic watching people walk past these glowing boards, it amazed me how few seemed to care. For most, those blinking numbers might as well be Christmas lights. But beneath them lies a quiet economic story shaping every Ugandan’s life, whether they know it or not.

Foreign exchange, or forex, is not just for bankers and traders. It&rsquo;s the engine that keeps an economy running. It&rsquo;s the rate at which Uganda&rsquo;s shilling meets the rest of the world, determining the cost of imports, exports, debt, travel, and even daily consumer prices.

For the country, forex signals economic strength. A stable or appreciating shilling means confidence in Uganda’s macroeconomic management, healthy reserves, and adequate foreign inflows.

For businesses, forex decides profit margins, pricing strategies, and competitiveness. And for the ordinary person, it quietly determines the price of bread, soap, cooking oil, and fuel.

According to Bank of Uganda data and market sources, the Ugandan shilling has appreciated by nearly 8% in just a few months, moving from UGX 3,740 per U.S. dollar in mid-2025 to about UGX 3,450 in early October 2025.

Regionally, Uganda is outperforming its peers. Kenya&rsquo;s shilling has stabilized around KSh 128 per dollar after a tough 2023, while Tanzania&rsquo;s currency remains largely steady due to strong export receipts. But Uganda&rsquo;s gain stands out-driven by strong inflows and calm market conditions.

This is not just statistical trivia. A move of 300 shillings per dollar can shift profit margins, change import bills, and affect inflation patterns. It&rsquo;s a big deal, even if most people don&rsquo;t see it.

Several powerful forces are converging to make the Ugandan shilling stronger.

First, foreign inflows have increased. Uganda continues to earn solid export receipts from coffee and gold, while remittances from Ugandans abroad remain robust, averaging over $1.4 billion annually. NGO and donor funds, as well as foreign investment linked to infrastructure and oil projects, are also injecting fresh dollars into the system.

Second, import demand has eased. With global shipping costs stabilizing and domestic demand subdued, fewer importers are scrambling for dollars. The result is a relative oversupply of foreign currency.

Third, the U.S. Federal Reserve&rsquo;s softer policy stance has globally weakened the dollar. As global investors anticipate lower returns on dollar assets, they diversify into other markets, including emerging currencies like Uganda&rsquo;s.

Finally, central bank actions and market confidence play a role. The Bank of Uganda&rsquo;s accumulation of foreign reserves, now estimated at over $4 billion, and its credible monetary stance have boosted investor trust. Stability breeds strength, and the shilling is reaping those dividends.

Here’s the reality: most Ugandans don’t follow forex movements. The average consumer doesn’t pause to wonder why the rate on the forex board has changed, because it feels distant. Yet it’s anything but. When the dollar drops from 3,740 to 3,450, the impact seeps into every corner of the economy. Importers who bring in goods from rice and fuel to phones and building materials, suddenly pay less in shillings.

If they choose to pass that saving to customers, prices drop, and inflation eases. For example, a trader importing goods worth $10,000 would have needed UGX 37.4 million a few months ago. Today, they need only UGX 34.5 million, a saving of UGX 2.9 million on the same order. That is real money.&nbsp;

But it cuts both ways. Exporters, especially coffee, tea, and fish traders, are earning fewer shillings per dollar, which eats into their local returns. And for those with USD loans, this is the moment of relief: every repayment installment now costs fewer shillings.

In short, the strong shilling quietly changes who gains and who loses. Yet because the effects filter through gradually, at the pump, in the market, in the price of construction materials, many never connect the dots.

For businesses, this is a season of reflection. Importers should capitalize on lower exchange costs to build stock or invest in efficiency. Exporters, on the other hand, should revisit pricing models, renegotiate supply contracts, and explore natural hedges such as sourcing local inputs to balance currency risk. For consumers, a stronger shilling can bring short-term relief.

Fuel and imported goods may become slightly cheaper, reducing transport and food inflation. But consumers should remember: forex markets are cyclical. Today’s comfort can vanish quickly if global shocks or local imbalances emerge.

And for policy makers, this moment is one to consolidate gains, maintaining macroeconomic discipline, supporting export diversification, and managing reserves prudently to avoid sharp reversals.

The dollar’s fall to around UGX 3,450 is more than a forex headline. It’s a signal of renewed confidence in Uganda’s economy, sound monetary management, and improved foreign exchange inflows outpacing demand. This appreciation reflects a moment of balance, where fiscal discipline, export performance, and investor trust are converging.

Yet, the strength of the shilling is fragile, currency markets react swiftly to shocks, policy shifts, or regional instability. So, when you pass a forex bureau and see those flashing rates, pause and think! those numbers quietly shape the price of your fuel, your rent, your child’s school fees, and even the cost of bread. The exchange rate isn’t distant economics; it’s the daily pulse of Uganda’s financial life.

The shift from 3740 to 3450 tells a quiet but important story about Uganda’s economy. It is a reminder that currency changes affect everyone, not just traders or economists. For Ugandans, this is a time to plan wisely. Importers can take advantage of the strong shilling to stock goods at lower cost. Exporters should review their prices and protect their earnings in case the rate turns again.

Households may feel some relief in prices, but it is wise to save or invest the extra value while it lasts. A stable shilling reflects confidence and good management, but it can change quickly with global or regional pressures. Staying alert, planning ahead, and managing money carefully will help Ugandans make the most of this season of strength.

The writer is a chartered accountant, analyst and chartered tax advisor

But one morning, it struck me, the U.S. dollar, that long-dominant currency, was losing ground to our shilling faster than most people realize.

Why the U.S. dollar’s fall in Uganda isn’t just a Forex story

It is the final week of September, and in many offices across Kampala the atmosphere feels heavier than usual. Business owners flip through ledgers, accountants type furiously on laptops, and landlords scroll through URA’s online portal, each chasing one thing, the deadline!

At the back of everyone’s mind is a single date: 30th September 2025. For some, it is a race against time to avoid interest and penalties, for others, it is the familiar ritual that marks the close of yet another tax year.

Amid this flurry of activity, the Uganda Revenue Authority (URA), through a public notice issued on 23rd September 2025, sounded its annual reminder: file and pay your income tax obligations before the month ends.

The message is not new, but its urgency has sharpened. With the economy growing and compliance systems becoming more digital, there is little room for delay or error.

Having issued the notice, URA was clear about what taxpayers must do before the September 30 deadline. The obligations cut across individuals, companies, and property owners, each with specific timelines and requirements, and these include; -

1. Final Income Tax Returns (FY 2024/25)

All individuals and non-individuals must file their final income tax returns and pay the corresponding tax for the accounting period 1st April 2024 to 31st March 2025. This process reconciles actual liability with provisional tax payments made during the year.

2. Provisional Returns for Non-Individuals (FY 2025/26)

Companies and other non-individual taxpayers are required to file provisional returns for the financial year 1st April 2025 to 31st March 2026. These estimates help URA track tax due in advance, with adjustments made later when final returns are submitted.

3. Provisional Returns for Individuals (FY 2025/26)

Self-employed persons and professionals must also file provisional returns covering the period 1st July 2025 to 30th June 2026. This ensures projected income is declared early, helping both taxpayers and the Authority manage expectations.

4. Provisional Tax Payments

For individuals, payments follow four possible instalments depending on the accounting date: June, March, December, or September.

For non-individuals, payments come in two instalments: by 31st March and by 30th September.

One other area URA has consistently highlighted is rental income tax. Unlike business or personal income, which is often tied to trading or employment, rental income is a tax head of its own.

The Authority insists and reminds that landlords and property owners must declare and pay this tax separately, regardless of whether they are also filing final or provisional returns for their businesses.

The emphasis about Rental tax is deliberate. Rental income is a fast-growing source of revenue in Uganda, but it has historically been prone to under-declaration or complete omission. URA ring-fenced it as an independent tax head to close compliance gaps and ensure that the property sector contributes its fair share to national revenue.

Take, for example, a taxpayer who runs a hardware shop in Kampala while also renting out three apartments in Najjera.

When filing their business income tax, they must declare profits from the hardware shop. Separately, they are also required to file a rental income tax return reflecting the rental earnings from the apartments. The two cannot be merged into one figure, because the law treats them differently. This distinction ensures that both streams of income are taxed fairly and transparently.

But perhaps the biggest lifeline in URA’s latest notice lies in its appeal to taxpayers with outstanding arrears up to 30th June 2024. URA has made it clear: if you clear your principal tax now, you could be granted waivers on all accumulated interest and penalties. This is no small matter.

For many, the interest and penalties charged over the years have ballooned far beyond the original tax due, leaving taxpayers trapped in a cycle of mounting debt. By offering this waiver, URA is giving businesses and individuals alike a chance to reset their tax affairs and regain compliance without being crushed by punitive charges.

This is the window of opportunity to act. Delay, and the arrears will continue to attract costs that far exceed the original liability. Act now, and you walk away lighter, compliant, and with renewed credibility in the eyes of the tax authority.

The message could not be louder. taxpayers who seize this chance will walk away lighter and more secure, while those who delay risk losing the relief altogether. URA has essentially opened a door for voluntary compliance, one that might not remain open for long.

The 30th September deadline is not simply a calendar date but a statutory compliance milestone with significant implications. Under the Income Tax Act, late filing or payment automatically attracts interest (Section 135) and penalties (Section 137), which can quickly surpass the principal tax.

For corporates, missing the deadline compromises access to Tax Clearance Certificates (TCCs), a prerequisite for government tenders, licensing, and financing, while exposing businesses to unnecessary audits, disputes, and reputational risk.

For individuals, particularly landlords and professionals, delays erode cash flow through escalating charges and may even trigger enforcement measures such as bank account garnishment or property attachment.

At the same time, URA’s enhanced digital compliance systems, including EFRIS and the online filing platform, make monitoring and enforcement more robust. With growing use of third-party data from banks, land registries, and employers, non-compliance is easier to detect and harder to conceal.

Timely compliance is therefore more than an administrative duty; it is a strategic safeguard that preserves financial credibility, reduces exposure to penalties, and positions taxpayers, both individuals and businesses as credible and trusted actors in Uganda’s formal economy.

“In today’s digital tax era, compliance is credibility, and timing is strategy, file on time to preserve trust, or delay and pay the price of liability.”

The writer is a chartered accountant and a chartered tax advisor

The Authority insists and reminds that landlords and property owners must declare and pay this tax separately, regardless of whether they are also filing final or provisional returns for their businesses.

Compliance Call: URA pushes for timely clearing 2024/25 while preparing 2025/26

When the Uganda Revenue Authority (URA) first rolled out the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) in January 2021, it marked a defining moment in Uganda’s tax administration.

When EFRIS first arrived, it was met with deep suspicion in places like Kikuubo and across Uganda’s vast informal sector. Many traders dismissed it as a hidden tax trap rather than what it truly was, a real-time sales reporting system.

I remember the uphill task of convincing my own clients that no new tax had been introduced, only a tool designed to capture transactions more transparently, protect genuine deductions, and modernize the way business records are kept.

Initially, the system applied to VAT-registered taxpayers. It ushered businesses into a new era of real-time, digital reporting, simplifying compliance, enhancing transparency, and curbing revenue leakages.

On July 25, however, the URA shook the nation again with General Notice No. 2218 of 2025 in the Uganda Gazette, quietly expanding EFRIS beyond its original scope.

Effective July 1, 12 additional sectors and business categories, regardless of VAT status, are now mandated to issue EFRIS-compliant invoices and receipts. These newly covered sectors are:

<ul><li>Wholesale and Retail of Fuel</li><li>Mining and Quarrying</li><li>Manufacturing</li><li>Electricity, Gas, Steam, and Air Conditioning Supply</li><li>Water Supply; Sewerage, Waste Management and Remediation Activities</li><li>Construction</li><li>Transportation and Storage</li><li>Accommodation and Food Service Activities</li><li>Information and Communication Technology (ICT)</li><li>Real Estate Activities</li><li>Professional, Scientific and Technical Activities</li><li>Arts, Entertainment and Recreation&nbsp;</li></ul>

In Uganda’s bustling marketplaces, dusty backplaces, buzzing workshops, and vibrant service hubs, the silent mandate of EFRIS 2.0 is already weaving itself into everyday transactions.

From the fuel pumps at roadside stations to construction sites, from hotels to IT firms and creative studios, businesses must now shift, digitally, into a new era of accountability.

The expansion of EFRIS is more than just a regulatory update, it’s a statement. It signals the government’s intention to modernize revenue collection without introducing new taxes.

Businesses including small ICT consultants, boutique hotels, artisanal creators, technical service providers, and informal real estate agents are now within the EFRIS net.

As of July 1, these businesses, regardless of VAT registration, must issue invoices or receipts either via URA’s EFRIS platform or URA-authenticated devices. This means that sale or service transactions in these sectors must be digitally recorded, complete with URA validation, as part of the tax ecosystem.

Non-compliance no longer involves a mere warning, this is a costly gamble. Under the Tax Procedures Code Act, businesses failing to issue a valid EFRIS invoice are liable for a penalty of UGX 6 million or the tax due on the goods/services, whichever is higher.

Crucially, customers in these newly included sectors must insist on valid EFRIS documentation, or their incurred expenses risk being disallowed as deductible when filing income tax returns. Here, the compliance burden cascades through the entire supply chain.

This expansion is not arbitrary. URA is smartly harnessing digital infrastructure to expand its oversight without creating new taxes. By broadening EFRIS’s reach, the tax authority gains insight into transactions across key sectors, insight previously lost in informal operations.

This paves the way for better tracking of revenue, identification of undeclared businesses, and ultimately, sustainable revenue growth, all without policy upheaval.

Adapting to EFRIS isn’t seamless. Some regions face connectivity challenges, others lack digitization resources. Training staff, integrating systems, and acquainting customers with new norms require effort. These are immediate hurdles.

Yet, the long-term advantages are compelling. Digital invoicing fosters accurate records, improves financial transparency, simplifies tax filing, and builds trust with customers, investors, and financial partners. For many, early compliance means a competitive edge in a rapidly formalizing market.

URA’s signal is unmistakable. EFRIS is becoming the norm, not the exception. Those in sectors yet to be designated should observe this shift as both warning and guide, preparation is better than reaction.

URA has hinted at additional sectors being added in future notices, underlining that the digital revolution in tax is an ongoing journey. The expansion of EFRIS to twelve new sectors is not just a tax policy update, it’s a cultural shift in how commerce is recorded and regulated.

For businesses, embracing EFRIS means protecting their clients’ ability to claim tax deductions, securing operations against fines, and embracing the professionalism that transparency brings.

EFRIS is no longer a feature for a few and it’s never a tax like how my local business men and women in Kikuubo thought, it's becoming the backbone of Uganda’s economic system. Compliance isn’t just smart, it’s essential.

The future rewards the prepared, and the digital receipts of today may well determine tomorrow’s success.

The writer is a Chartered Accountant &amp; a certified Tax Advisor

When the Uganda Revenue Authority (URA) first rolled out the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) in January 2021, it marked a defining moment in Uganda’s tax administration.

URA turns up EFRIS heat to more 12 sectors

“So, you did absolutely nothing? Not even breathed?” – What filing NIL tells the taxman

Across Uganda today, filing NIL tax returns has quietly become a lifestyle.

Whether it’s a kiosk operator in Kikuubo, a fast-rising consultant in Najjera, or a company director in Bugolobi, the story often sounds the same: “We had no activity. No sales. No expenses. Let’s just file NIL and be done with it.”

It sounds quite neat, even smart, but is it true?

In practice, filing a NIL return is not a placeholder. It’s a powerful legal declaration.

You are telling the Uganda Revenue Authority that your business experienced zero taxable activity in that month or year of income. No income. No purchases. No paid staff. No rent. No data bundles.

No mobile money inflows. Not even a boda expense. Basically, you're saying your business didn’t just sleep but rather flatlined.

Now imagine repeating that NIL message month after month. Meanwhile, URA notices that:

<ul><li>You filed NIL VAT, but a supplier declared they sold goods to you.</li><li>You filed NIL WHT, but a consultant filed income showing you paid them.</li><li>Your TIN is quiet, but your bank is busy.</li><li>You declared no employees, but NSSF records say otherwise.</li></ul>

URA now operates in a connected tax ecosystem, where one taxpayer’s declaration is validated by what others report. If you don’t declare an invoice, but someone else declares they invoiced you, URA knows.

If you file NIL returns, but a supplier or service provider lists you as a client in their return, URA’s digital red flags go up. And they’re no longer guessing, they have the data.

Even more worrying is the rise of invoice trading, a dangerous and illegal trend where struggling businesses buy or sell fake VAT invoices to appear compliant or claim input tax.

Some businesses that genuinely made no purchases are filing fake VAT returns to dodge the NIL label. Others are selling their invoice books for a fee to help friends “reduce tax.”

But URA keeps watching, and every mismatched invoice or suspicious pattern is now traceable. Filing NIL returns repeatedly is no longer seen as harmless. It’s quickly becoming one of the key risk indicators that trigger audits, system reviews, and even taxpayer profiling.

URA understands that some businesses are genuinely inactive, but they also know that others are simply avoiding the truth.

Yet many taxpayers, especially SMEs, are stuck in a cycle of NIL filings out of fear, confusion, or poor bookkeeping.

They believe it’s better to “just file something” than deal with penalties or URA follow-up. But this habit can be more dangerous than doing nothing at all.

Why? Because every NIL return says you did absolutely nothing—and that statement must be true and provable.

My article breaks down the truth about NIL returns:

<ul><li>What they mean by Income Tax, VAT, PAYE, and WHT</li><li>When filing NIL is legally safe and justified</li><li>How URA cross-checks your filings with third-party declarations</li><li>And why invoice trading may soon land some people in legal hot water</li></ul>

There are legitimate scenarios where filing NIL is justified. Maybe your company is dormant, newly registered, or hasn’t started operations yet. Seasonal businesses may also have inactive months.

But this justification must match your reality. If your business name is still circulating in the market, you maintain an active license, or you're running ads, moving stock, or paying utilities, URA has reason to doubt your NIL filing.

Falsely filing NIL is equivalent to giving a false statement under the Tax Procedures Code, punishable by penalties or prosecution. You can’t file NIL for VAT, but still file income tax showing sales.

You can’t file NIL for PAYE while declaring salary expenses in your financials. And you can’t file NIL for WHT when you’re listed as having rented a commercial property or subcontracted services.

URA’s integrated e-tax system performs these internal cross-checks, and contradictions raise automated red flags. Inconsistencies can trigger tax penalties. Even if you remain silent, others are talking.

URA’s compliance programs include third-party information collection from mobile money operators, landlords, telecoms, suppliers, commercial banks, NSSF, and even utility companies. If your supplier declares they sold to you (and claim input VAT), but you declared NIL, something is off.

If a landlord files withholding on your rent payments, and you report NIL across all tax heads, that’s suspicious. URA doesn’t have to believe your NIL declaration when others are naming you in their audits, denial of refunds, or risk suspension of your TIN.

One of the most abused tricks in Uganda’s business world is buying invoices to fake expenses. A struggling taxpayer may pay a broker to issue them fake fuel or goods invoices so they can claim VAT or inflate expenses for Income Tax. But this web is unraveling.

URA is matching invoice data with Digital Tax Stamps, e-Invoicing (EFRIS), and supplier filings. When you file NIL but your company is appearing on numerous invoices as a buyer or seller, you are exposed. Offenders can face penalties, deregistration, or even jail under fraud charges.

If URA sees you filing NIL for six or more consecutive periods, especially for VAT or PAYE, it assumes one of two things: either you’re abusing the system, or your business has collapsed and needs to be deregistered.

The tax authority uses a risk-scoring model, and NIL repeaters fall into the non-compliant high-risk cluster. This may trigger: - Forced VAT deregistration, Withheld Tax Clearance Certificates (TCCs), Audit selection, Denial of refund claims, Restrictions on EFRIS usage.

If your business is indeed not making money, explain it clearly when filing and consider adding a cover note. If you’re waiting on a big deal or have temporarily shut down, update your status with URA or file returns under the correct assumptions.

Above all, do not panic into filing NIL just because others do. A wrongly filed NIL return today could cost you credibility, cash, and compliance down the road. Tax isn’t about looking broke—it’s about being honest.

It is prudent therefore to think that before you hit “Submit NIL” again this month, pause and ask: “Can I defend this if the taxman knocks tomorrow?”

Because while you might believe your books are invisible, someone else’s tax return may already be exposing you.

The writer is a Chartered Accountant and a chartered Tax Consultant

Falsely filing NIL is equivalent to making a false statement under the Tax Procedures Code, which is punishable by penalties or prosecution.

Why repeated NIL tax declarations attract URA’s smart scrutiny

Can digital tax stamps solve Uganda&rsquo;s dual challenge of tax evasion and consumer protection?

There has been a growing threat over the years from different companies and institutions over the so many counterfeits products in the country.

It is estimated that millions of dollars are lost annually as a result of tax evasion linked to the sale of untaxed counterfeit goods.

These counterfeit goods not only undermine legitimate businesses but also erode valuable government revenue and jeopardize the health and safety of consumers.

Uganda’s fight against counterfeit goods has taken a bold leap forward with the introduction of Digital Tax Stamps (DTS).

But how do these digital innovations balance the need for increased tax revenue while safeguarding Ugandan consumers from harmful substandard products?

At their core, digital tax stamps serve a dual purpose: they verify the authenticity of goods and ensure that the correct taxes have been paid on those goods.

Joshua Kato

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