VAT Registration in Uganda: Threshold, EFRIS and What Businesses Should Know

Jurisdiction: Uganda · Topic: VAT registration and EFRIS · FGL review: September 2026

Not every business in Uganda is automatically required to register for VAT. The key starting point is whether the person is making taxable supplies and whether the statutory registration threshold has been met or is expected to be met.

VAT registration and EFRIS are related, but they are not the same thing. VAT is a tax regime. EFRIS is an electronic invoicing and receipting system used by URA for transaction reporting and compliance.

What is VAT in Uganda?

Value Added Tax is an indirect tax charged on taxable supplies made by taxable persons, on taxable imports of goods and on imported services that are not exempt. Uganda's standard VAT rate is generally 18%, while some supplies are zero-rated at 0% and others are exempt under the VAT Act.

Who must register for VAT?

Under the current VAT Act and URA guidance, the annual registration threshold is UGX 300 million of taxable supplies. The three-calendar-month registration test is UGX 75 million, being one quarter of the annual threshold.

A person who exceeds the applicable threshold must apply for VAT registration within the statutory timeframe. A person below the compulsory threshold may apply for voluntary registration, subject to URA's requirements.

The 2026 amendment changed this threshold. The Bill as introduced referred to UGX 250 million, but Parliament passed the measure at UGX 300 million. URA's current dedicated VAT guidance also states UGX 300 million annually and UGX 75 million for the three-calendar-month test. Some older URA pages may still display the former UGX 150 million / UGX 37.5 million figures, so finance teams should rely on the current VAT guidance and enacted 2026 position.

What turnover counts toward the threshold?

The registration test focuses on the value of taxable supplies, not simply every shilling entering a bank account. Exempt supplies and other amounts that are not taxable supplies need to be analysed separately.

Businesses close to the threshold should monitor taxable turnover monthly instead of waiting until year end. Rapid growth, a large contract or seasonal sales can cause the three-month test to be met before the annual accounts are prepared.

Does being below the VAT threshold mean EFRIS does not apply?

No. EFRIS obligations should be checked separately from VAT registration. URA has expanded EFRIS usage to additional taxpayer categories, and its August 2026 notice lists sectors that must use EFRIS even where the taxpayer is not being analysed solely through the VAT-registration threshold.

The same URA notice provides limited exclusions for some very small businesses and low rental-income cases, but those exclusions depend on the taxpayer and activity. A business should therefore ask two separate questions:

• Am I required to register for VAT?
• Am I required to issue e-invoices or e-receipts through EFRIS?

What VAT registration changes operationally

Once registered, a taxpayer must apply the VAT rules to taxable supplies, maintain proper records, file VAT returns, account for output tax and determine whether input tax is claimable under the law. VAT-registered taxpayers are also expected to comply with EFRIS requirements for qualifying transactions.

Registration therefore affects pricing, invoicing, customer contracts, purchase documentation, cash flow and reconciliations. It should not be treated as a one-off portal exercise.

EFRIS is not a separate tax

EFRIS supports electronic invoicing, receipts and transaction reporting. It does not replace the VAT Act and it does not by itself determine whether a supply is standard-rated, zero-rated, exempt or outside the scope of VAT.

However, EFRIS evidence increasingly affects practical tax administration. For example, FGL's EFRIS and VAT withholding guide explains the 1 July 2026 VAT-withholding change linked to valid e-invoices and e-receipts.

Three situations businesses should distinguish

• Below the compulsory VAT threshold: VAT registration may not be compulsory, but EFRIS and other tax obligations may still apply.
• Above the compulsory VAT threshold: the business should address VAT registration promptly and align invoicing and accounting processes.
• Already VAT registered: the business should monitor return accuracy, EFRIS data and supporting input-tax documentation rather than assuming registration alone means compliance.

A practical monthly VAT control

Maintain a monthly reconciliation between accounting sales, EFRIS sales, VAT-return sales and the general ledger. Investigate timing differences, credit notes, exempt or zero-rated supplies, manual journals and transactions that have not flowed correctly between systems.

FGL's ERP sales, VAT sales and income-tax reconciliation guide provides a fuller control framework. Cross-border service purchases should also be reviewed separately using the VAT on imported services guide.

Sources

• Uganda Revenue Authority — current Value Added Tax guidance, including the UGX 300 million annual threshold and UGX 75 million three-month test.
• Ministry of Finance — Budget Speech FY 2026/27, recording Parliament's approval of the UGX 300 million VAT threshold.
• Parliament of Uganda — 2026 tax-law reporting on the VAT threshold increase.
• Uganda Revenue Authority — Additional Taxpayers Required to Use EFRIS (August 2026).

FGL note: VAT and EFRIS obligations depend on the taxpayer's facts, supplies and current legal requirements. Verify the current position before registration, filing or system implementation.