URA, EFRIS and VAT WHT: What Finance Teams Should Check Before Filing

 From 1 July 2026, Uganda’s VAT withholding rules changed in an important way.

URA has recently stated that, effective 1 July 2026, a designated VAT withholding agent is not required to withhold VAT on payments to a supplier who issues an EFRIS invoice or receipt. This follows the 2026 VAT amendment, which excludes VAT withholding where a designated person pays for taxable supplies and is issued an e-invoice or e-receipt.

That sounds simple. But a practical question has now emerged:

What happens to invoices that were issued before 1 July 2026 but are being reviewed, paid, or followed up after that date?

The answer should not be reduced to one sentence. The safer approach is to separate three things: the invoice date, the payment date, and the existence of a valid EFRIS invoice or receipt.

Under the old VAT withholding regime, designated VAT withholding agents were required to withhold VAT when making payment for taxable supplies, unless an exemption applied. Therefore, where payment was made before 1 July 2026 and VAT WHT was not filed or remitted, URA may still pursue that old-period obligation.

That is different from saying that every invoice issued before 1 July 2026 remains automatically subject to VAT WHT forever.

For invoices issued before 1 July 2026 but paid after 1 July 2026, finance teams should carefully check the basis of any URA request. The key questions are:

1. Was the payer a designated VAT withholding agent at the relevant time?
2. Was the supplier VAT registered, or otherwise within the VAT withholding rule?
3. When was payment actually made?
4. Was there a valid EFRIS e-invoice or e-receipt?
5. Is URA pursuing a pre-1 July liability, or treating the pre-1 July invoice date as enough by itself?

Income tax WHT must also be considered separately. The VAT WHT amendment did not abolish ordinary withholding tax under the Income Tax Act. A transaction may therefore escape VAT WHT after 1 July 2026 because of a valid EFRIS invoice or receipt, while still being subject to income tax WHT if the Income Tax Act applies.

The practical message is this:

Do not assume that all old invoices are free from VAT WHT. But also do not assume that the invoice date alone settles the matter.

Where URA contacts a business about VAT WHT on pre-1 July 2026 invoices, the business should request clarification of the tax period, payment date, legal basis, and EFRIS status being relied on. That will help distinguish a genuine unpaid old-period VAT WHT liability from a wider interpretation that may need further clarification.

Further Reading

URA: Invoice/Receipt Issuance under EFRIS

Finance & Governance Lab: VAT and Ugandan Tax