The Uganda Revenue Authority (URA) has commenced implementation of its Domestic Taxes Taxpayer Compliance Risk Management Strategy and Compliance Improvement Plan for the 2026/27 financial year, unveiling a wider data driven system that will use taxpayer information, business transactions and sector trends to identify compliance gaps and improve tax collection across the country.
The new strategy is designed to strengthen voluntary tax compliance while targeting tax evasion, inaccurate declarations, non registration and late filing through risk based interventions rather than blanket enforcement.
“The Strategy adopts a data driven and risk based approach to promote voluntary compliance, address emerging compliance risks and ensure fair, transparent and efficient tax administration,” URA said.
The tax body said it will rely on taxpayer records, transaction data, industry trends and other lawful information to determine where compliance gaps exist before carrying out appropriate interventions.
The latest initiative builds on years of compliance reforms that have seen URA increasingly shift from manual tax administration to digital monitoring systems. Since introducing the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) in January 2021, the authority has expanded electronic invoicing, strengthened Digital Tax Stamps, improved taxpayer registration systems and integrated data from multiple government platforms to detect under declaration and improve revenue collection.
URA says the Compliance Improvement Plan for FY2026/27 will focus on registration, filing, declaration, payment and reporting compliance across the taxpayer population.
The authority said the plan will prioritize formalisation of taxable businesses, timely filing of returns, accurate reporting of sales and income, proper management of outstanding tax obligations, compliance with EFRIS and Digital Tax Stamps requirements, sector specific compliance interventions and expanded taxpayer education.
“Taxpayers are encouraged to review their records, systems and internal controls to ensure complete and accurate declarations,” URA said.
The authority also urged businesses and individuals to cooperate whenever they are selected for compliance interventions or audits.
The strategy comes as Government pursues ambitious domestic revenue targets to finance infrastructure, health, education and other national development priorities while reducing reliance on borrowing. For the 2026/27 financial year, Government expects to raise Shs45.96 trillion in domestic revenue, with Shs40.16 trillion projected to come from tax collections.
URA Commissioner General John R. Musinguzi has consistently maintained that Uganda’s revenue potential can only be fully realised if businesses embrace digital compliance systems, arguing that technology enables fairer taxation while making it easier for taxpayers to keep proper records.
“When a person issues an e receipt through EFRIS, we are able to collect VAT,” Musinguzi said during earlier taxpayer engagements, adding that the system is available through mobile applications, web platforms, desktop software and direct system integration.
One of the biggest pillars of the new compliance strategy is the continued expansion of EFRIS, which URA insists is not a new tax but a business management tool that helps businesses keep accurate records while enabling real time tax reporting.
The system, which initially became mandatory for VAT registered taxpayers in January 2021, was later expanded to include non VAT registered taxpayers operating in 12 gazetted sectors beginning July 2025, including manufacturing, mining, transportation, accommodation, information technology, real estate, professional services, entertainment and fuel retail.
Businesses operating in those sectors are required to issue electronic invoices and receipts through EFRIS, while expenses unsupported by valid electronic receipts may not qualify for income tax deductions where suppliers are legally required to use the system.
The authority says the technology has significantly transformed tax administration by enabling automatic pre filling of VAT returns, digital storage of invoices, faster verification of transactions and quicker processing of legitimate refund claims.
The new strategy also builds on lessons from previous compliance programmes that combined taxpayer education with enforcement. During extensive EFRIS sensitisation campaigns conducted across Kampala’s Central Business District, URA held workshops, door to door engagements and business meetings to explain the new requirements before carrying out enforcement operations.
The campaigns followed concerns from traders who feared EFRIS had introduced new taxes, prompting URA officials to repeatedly clarify that the platform was designed to improve record keeping and simplify compliance rather than create additional taxes.
Over the past three years, the authority has expanded taxpayer education through workshops, webinars, media programmes, tax clinics and translated tax information into 13 local languages to improve understanding among businesses across the country.
The authority has also used the Taxpayer Registration Expansion Programme to formalise businesses and widen Uganda’s tax base by working closely with agencies such as the Uganda Registration Services Bureau to simplify registration and issue instant Taxpayer Identification Numbers.
The compliance reforms have attracted international recognition, with tax authorities from countries such as Nigeria benchmarking URA’s Compliance Risk Management model after recommendations from the International Monetary Fund.
Under the 2026/27 strategy, URA will pay closer attention to employers failing to register for Pay As You Earn, businesses that fail to issue EFRIS receipts, inconsistencies between export records and VAT declarations, under declared withholding taxes, related party transactions, stock declaration discrepancies and suspected cases of tax avoidance or systemic exploitation.
The authority said taxpayers should ensure their registration details are updated, file complete returns on time, declare all taxable income and sales, maintain proper books of accounts, comply with EFRIS and Digital Tax Stamps requirements where applicable, pay taxes within prescribed timelines and respond promptly to compliance communications.
“Together, these measures are intended to improve voluntary compliance, close revenue leakages and build a fairer and more transparent tax administration system,” URA said.
