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• Published Sep 27, 2024

Business environment affected by the enforcement of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) by the Uganda Revenue Authority

The Business Climate Index (BCI) deteriorated marginally from 98 basis points in the previous quarter to 81 in the current quarter (April to June 2024). The deterioration was because of the unfavorable business environment, reduction in business optimism, sales turn over, decline in labour availability, and reduction in salaries and business profits. The agriculture sector index registered a reduction of 4.9 percentage points decline, from 82 in the previous quarter to 78 in the current quarter. The manufacturing and service sectors registered a decline of 8 and 5 percentage points, respectively. In the current quarter ended June 2024, the enforcement of tax policy, worsening macroeconomic factors, electricity availability and limited access to finance were the major constraints to business operations. The same challenges prevailed in the quarter ended March 2024, indicating that business challenges in Uganda are persistent. The near-term business sentiments indicate that conditions for doing business are expected to improve, as the index is projected to rise from 97 to 119. This expected improvement is mostly driven by low input costs, high-capacity utilisation, high sales turnover and high profitability. The projected indices for the agriculture, service, and manufacturing sectors are 105, 120 and 116, respectively. The enforcement of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) by Uganda Revenue Authority (URA) affected 51 percent of the surveyed businesses. EFRIS aimed at addressing the tax administration challenges relating to business transactions and issuance of receipts.

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