Uganda Revenue Authority (URA) Commissioner General John R. Musinguzi has applauded businessman Sudhir Ruparelia for embracing electronic tax invoicing and described him as one of the pioneers in the real estate sector complying with the authority’s tax requirements.
Musinguzi made the remarks during an engagement between URA and city landlords, where he called for closer cooperation between the tax authority and property owners to reverse a decline in rental income tax collections.
The Commissioner General said the real estate sector remains an important part of Uganda’s economy, contributing about six to seven percent to the country’s Gross Domestic Product (GDP), while creating jobs, providing a market for manufactured products and supporting the financial sector.
“Despite this significance and growth, the compliance levels are dropping. Last financial year, all taxes grew by double digit with an average growth of about 14 percent, but the rental income tax head declined by one percent,”Musinguzi said.
He said the engagement with landlords was intended to establish the reasons behind the decline and find solutions rather than punish property owners.
“The purpose for this meeting was to have a candid conversation, rectify the decline and look at what is happening in this sector, not to apportion blame, penalise or victimise each other,”he said.
Musinguzi singled out Ruparelia, one of Uganda’s prominent property developers and landlords, for embracing the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), which URA uses to improve the recording and tracking of business transactions.
“We appreciate the pioneers that have embraced the usage of EFRIS like Dr. Sudhir Ruparelia,”Musinguzi said.
Sudhir’s recognition by the URA chief comes as the Ruparelia Group continues to operate a large portfolio of commercial properties in Kampala, with RR Pearl Tower One on Yusuf Lule Road emerging as one of the group’s major developments.
The building has also become closely associated with URA itself. Several key departments of the tax authority moved from the Nakawa headquarters to RR Pearl Tower in 2025, including the Large Taxpayers Office, Public Sector and Medium Taxpayer divisions, Risk and Strategy Department and Petroleum Division. URA subsequently moved its Real Estate Tax Office to the ninth floor of RR Pearl Tower One on September 7, 2026, saying the relocation was intended to improve access to real estate tax services.
The arrangement has put URA, the very institution responsible for enforcing rental tax compliance, among the tenants occupying property owned by Ruparelia. URA has defended the decision to take additional office space at the building, saying its expansion and the need to bring services closer to taxpayers were behind the relocation.
Reports on the cost of the tenancy have differed, with some reports putting the annual rental expenditure at about Shs18 billion, while URA has disputed figures circulating publicly about the cost and said its procurement process was conducted competitively and in accordance with procurement rules.
Ruparelia’s relationship with URA therefore extends beyond the current debate on rental income compliance. His company is also a landlord to the tax authority, making the businessman an example of a property owner operating within the same tax and rental ecosystem URA is seeking to regulate.
Musinguzi said URA wants landlords to work with the authority to improve compliance, particularly through EFRIS, rather than waiting for enforcement measures.
“If we agree today and work together on the front of compliance, URA will dedicate a team to support you on EFRIS onboarding and provide written guidance and physical engagements to support you in regards to EFRIS,”he said.
He urged landlords to appoint dedicated personnel to handle tax matters and ensure tenants receive electronic receipts reflecting the actual rent paid.
“We require a dedicated person to exchange notes on the side of the landlords. Boldly and frankly issue those EFRIS receipts to your tenants. Where there’s compliance, there are benefits,”Musinguzi said.
URA has required businesses in the real estate sector covered by its EFRIS rules to issue electronic invoices or receipts for transactions. The authority has also advised tenants to demand EFRIS receipts from landlords because the records can support rental expense claims and, where applicable, input tax claims for VAT-registered businesses.
Musinguzi said landlords and URA both have responsibilities to fulfil if the country is to improve tax collection, adding that policy concerns raised by property owners should be addressed through dialogue.
“I listened carefully to all submissions, for example Mr. Ddumba who raised about the capping of expenses, unfavourable rates among others. We all need to work together to work with the law to curb non-compliance,” he said.
He said Uganda’s tax-to-GDP ratio currently stands at about 14 percent, while debt servicing is consuming a substantial share of the revenue collected by government.
“Our tax to GDP is now at 14 percent, debt burden has increased with 40 percent of what is collected used to service the debt. It’s time we work together and improve our tax to GDP. Our target is to increase the tax to GDP to at least 25 percent in the short term, with the real sector being a strong pillar in mobilisation through the use of EFRIS,”Musinguzi said.
The Commissioner General also said URA was willing to consider concerns raised by landlords on existing tax policy, including the treatment and capping of allowable expenses, but stressed that any changes would require engagement between the sector and government.
“There may be a need to apply a change in policy, but we must have a platform to negotiate. The sooner we work together to improve compliance in this sector, the quicker we shall be closing the gap identified, for example capping from 50 percent to 70 percent,” he said.
While warning that URA would enforce the law where voluntary compliance fails, Musinguzi said enforcement was not the authority’s preferred starting point.
“When dialogue does not work, then enforcement comes into play. However, it will never be our first priority,”he said.
He further said no landlord had been prosecuted for false declaration of rental income during his tenure as Commissioner General, while reminding property owners that the Tax Procedures Code Act provides for action where taxpayers fail to meet their obligations.
The engagement comes at a time when URA is seeking greater transparency in the real estate sector through digital reporting of rental transactions. The authority has said EFRIS enables it to obtain accurate records of transactions and compare rental income declared by landlords with actual transactions.
For Ruparelia, whose property portfolio includes RR Pearl Tower One and other major commercial and hospitality developments, the recognition from the URA chief places his businesses among the landlords the tax authority is holding up as examples of EFRIS adoption.
The engagement brought together URA management, city landlords, representatives of the landlords’ association, KACITA Patron Ambassador Godfrey Kirumira, Ruparelia and other stakeholders to discuss how the real estate sector can improve tax compliance while addressing concerns raised by property owners.
