URA Tax Compliance Focus Areas for 2026/27

On 7 September 2026, the Uganda Revenue Authority published the compliance risks that will receive particular attention under its Compliance Improvement Plan for the 2026/27 financial year. The notice lists 22 risk areas covering inventory, excise duty, exports, sales, expenses, payroll, withholding tax, EFRIS, Digital Tax Stamps and related-party transactions.

The practical response is to review the links between your accounting records, tax returns and operational systems before URA asks for an explanation. Do not force every record to match. Identify genuine errors, correct them through the proper process, and document valid timing, classification or system differences.

This article explains what URA has announced and sets out a practical readiness programme for finance teams, tax managers and business owners. It does not assume that every organisation will face an audit or that every variance represents unpaid tax.

What URA Actually Announced

URA says the FY 2026/27 strategy will use taxpayer information, transactions, sector trends and other lawful data to identify compliance gaps and determine the appropriate intervention. The official focus extends beyond audits. It covers registration, filing, declarations, payment, EFRIS, Digital Tax Stamps, sector-specific action, taxpayer education and support. Read the URA notice.

Are these “URA tax audit focus areas”?

That phrase is useful shorthand for what many taxpayers may search for, but URA’s notice is broader than audit. It describes the 22 items as key compliance risks under a risk-management strategy and says identified gaps will lead to appropriate, targeted interventions. The same notice separately refers to taxpayers selected for “compliance interventions or audit”. FGL therefore uses compliance focus areas rather than assuming that every listed risk will result in an audit.

The wider fiscal context also matters. Uganda's FY 2026/27 Budget Speech places stronger tax administration and compliance within the financing strategy and provides for Shs 40.16 trillion in tax revenue. That does not prove how any individual taxpayer will be selected, but it confirms that compliance enforcement is central to the year's revenue programme.

The Main Compliance Risk Groups

URA published 22 individual risks. For practical review, they can be grouped into seven control areas. The grouping below is FGL's interpretation of URA's list; it is not a separate classification issued by URA.

Risk group	Examples in URA notice	Immediate control test
Inventory, manufacturing and excise	LED stock variances and overstated damages; balance-sheet stock; overclaimed excise on converted goods; input-output ratios; VAT-to-LED values; DTS quantities	Reconcile quantities and values from production and inventory records through LED, DTS, VAT, cost of sales and the general ledger.
Sales, exports and fiscal documents	ASYCUDA exports against VAT exports and income tax sales; declared sales against stock movements; EFRIS receipt issuance and usage	Prepare a transaction-level sales bridge across invoicing, customs, EFRIS, VAT returns, income tax schedules and the ledger.
Expenses and balance-sheet integrity	Cost of sales; retained earnings; trade payables; expenses linked to assets not recorded on the balance sheet; unclassified Other expenses	Substantiate major balances and unusual movements with schedules, documents, ageing analysis and approved journal support.
Payroll and PAYE	Employers not registered for PAYE; under-declared PAYE by secondary employers	Reconcile HR, payroll, bank payments, the ledger and PAYE returns, and review all entities that employ or pay staff.
Withholding tax	Undeclared WHT on international or foreign transactions, professional fees and management fees	Review payment ledgers and contracts by supplier, residence, service type and tax treatment before filing or correcting returns.
Related-party transactions	Mispricing of related-party goods transactions; excessive related-party payments	Confirm the commercial basis, agreements, pricing method, approvals and supporting evidence for group transactions.
Registration, filing and payment	Formalisation; correct registration; timely filing; accurate declarations; payment and outstanding obligations	Check the taxpayer profile, tax types, filing calendar, return status, payments, credits, objections and arrears.

Inventory, Manufacturing and Excise

Eight of URA's listed risks concern stock, production or excise information. They include opening and closing stock variances in Local Excise Duty returns, overstated damaged goods, differences between trading-account stock and balance-sheet stock, high manufacturer input-output ratios, and mismatches between Digital Tax Stamp quantities and declared production or sales.

Affected organisations should be able to trace quantities from raw-material receipts through production, wastage, finished goods, damages, transfers, sales and closing stock. Quantity reconciliations should then connect to the financial values reported in cost of sales, VAT and excise returns. A spreadsheet that balances only after an unexplained adjustment is not strong evidence.

For damaged or converted excisable goods, retain the approvals, inspection records, production notes, conversion calculations and tax treatment used. Where Digital Tax Stamps apply, compare stamps ordered, received, activated, unused, damaged and attached to goods with production and sales records.

Sales, Exports and EFRIS

URA will compare ASYCUDA exports with VAT exports and income tax sales. It will also look at declared sales against stock levels and at the issuance and use of EFRIS receipts. The relevant question is whether the same transaction can be traced consistently across customs, invoicing, accounting and tax systems.

Prepare a monthly sales bridge covering the general ledger, sales sub-ledger, EFRIS, VAT return, income tax schedules and ASYCUDA export data. Explain differences such as timing, credit notes, cancelled invoices, advances, foreign-currency translation, exempt or zero-rated treatment, and legitimate accounting adjustments. Each explanation should point to source documents and an identified owner.

Expenses and Balance-Sheet Accounts

URA's list includes overstated cost of sales, inconsistent retained earnings brought forward, overstated trade payables, expenses claimed on assets not recorded on the balance sheet, and amounts grouped under Other expenses in the income tax return.

Review material expense accounts and unusual year-on-year movements. Break broad or suspense-style balances into clear categories. Reconcile retained earnings to the prior year's closing balance and approved movements. Test trade payables using supplier statements, ageing reports, subsequent payments and unmatched goods or invoice reports. Where an expense relates to an asset, document why the accounting and tax classification is appropriate.

Payroll, PAYE and Withholding Tax

URA will pay attention to employers that are not registered for PAYE, under-declared PAYE involving secondary employers, and undeclared withholding tax on foreign, professional and management-fee payments.

Reconcile employee and contractor data across HR records, payroll, bank payments, expense ledgers and PAYE returns. Review allowances, benefits, directors' payments, consultants and staff paid outside the main payroll. For supplier payments, use the contract and actual service to determine the tax treatment. Vendor names or ledger descriptions alone may be misleading.

Cross-border reviews should include the supplier's residence, the nature and place of the service, the payment route, any treaty position relied upon, and the supporting tax advice or documentation. Rates and exemptions should be checked against the law in force for the relevant period before any correction is made.

Related-Party Transactions

The list identifies mispricing of related-party goods transactions and excessive related-party payments. Organisations with group purchases, services, loans, royalties, management charges or shared-cost arrangements should review whether the transaction had a commercial basis and whether the amount is supported by the chosen pricing method.

Keep executed agreements, invoices, allocation keys, evidence of services received, approvals, comparable information and transfer-pricing documentation where required. A payment may appear in the ledger and still lack enough evidence to support its amount or business purpose.

What the Risk List Means in Practice

The common thread is data comparison. URA says it will use taxpayer information and transactions to identify gaps. Its published risks show the kinds of comparisons likely to matter: one return against another, tax data against the ledger, customs data against sales, production against stamps, and payroll against employer registrations.

A difference is not automatically an offence or an additional tax liability. Accounting rules, tax rules, invoice timing, customs processes and system design can produce legitimate differences. The risk arises when the organisation cannot identify the difference, cannot support it, or has allowed the same error to continue across periods.

FGL's practical interpretation is that tax readiness should be managed as a recurring financial-control process. It should not begin when an audit notice arrives. Finance, tax, payroll, procurement, sales, inventory, customs and IT teams should know which records they own and how those records connect.

A Practical Compliance Readiness Programme

1. Confirm the organisation's tax profile. Review its TIN details, registered tax types, business activities, branches and filing obligations. Check whether changes in activities, staff, turnover or sector have created a new registration requirement.
2. Build a tax data map. List each source system and report used for sales, purchases, inventory, payroll, EFRIS, Digital Tax Stamps, customs and the general ledger. Assign an owner to each source and record how data moves into each return.
3. Reconcile revenue every month. Compare sales sub-ledgers, EFRIS, VAT, income tax schedules, ASYCUDA exports and the general ledger. Keep a rolling schedule of reconciling items with dates, amounts, reasons, evidence and approval.
4. Reconcile quantities as well as values. Manufacturers and traders should connect stock movements, production, damages, Digital Tax Stamps, sales and closing stock. Review negative stock, unusual yields, unexplained wastage and large manual adjustments.
5. Review balance-sheet carry-forwards. Confirm retained earnings, trade payables, tax accounts and inventory opening balances against the prior year's signed records. Investigate migrated or manually posted balances before they enter the next return.
6. Review payroll and supplier payments. Test whether every employee, secondary employment arrangement, consultant, professional fee, management charge and foreign payment received the correct tax review.
7. Review related-party dealings. Match each material transaction to an agreement, invoice, business purpose, pricing support and approval. Confirm that the accounting description agrees with what was actually supplied.
8. Clean up broad expense classifications. Analyse Other expenses, suspense accounts and large journal entries. Reclassify errors through approved accounting processes and preserve the original audit trail.
9. Create a tax evidence file. Keep returns, payment confirmations, reconciliations, contracts, invoices, customs documents, EFRIS records, production reports, stamp reports and management approvals in a consistent structure.
10. Set a response protocol. URA communications should be logged, assigned and answered within the stated time. Responses should be reviewed for factual consistency and supported by the documents cited.

A 30-Day Readiness Plan

Period	Priority
Days 1-5	Confirm registrations, filing status, outstanding obligations and responsible owners.
Days 6-12	Extract and reconcile sales, EFRIS, VAT, income tax and ASYCUDA data.
Days 13-18	Reconcile inventory, production, LED and Digital Tax Stamp information where applicable.
Days 19-24	Review payroll, withholding tax, expenses, payables and related-party transactions.
Days 25-30	Correct verified errors through the proper process, document valid differences, obtain management sign-off and schedule recurring reviews.

Questions Management Should Ask

• Can we explain every material difference between EFRIS, VAT, income tax sales, customs records and the general ledger?
• Do our stock and production quantities connect to cost of sales, excise data and Digital Tax Stamp records where applicable?
• Are damaged goods, wastage, conversions and manual stock adjustments independently reviewed and documented?
• Have we reviewed payments to employees, consultants, foreign suppliers and related parties outside the ordinary payroll or procurement process?
• Can we support material payables, Other expenses and related-party charges with evidence of what was supplied and why the amount is reasonable?
• Are tax reconciliations reviewed throughout the year, or only when a return or audit response is due?

Conclusion

URA's FY 2026/27 Compliance Improvement Plan gives organisations a useful opportunity to test their records before a compliance intervention begins. The published risks point to the records URA may compare and the gaps finance teams should investigate now.

The objective is not to manufacture agreement between systems. It is to keep complete records, find real errors, correct them properly, and explain valid differences with evidence. An organisation that performs these checks routinely will be better placed to file accurate returns and respond calmly if URA raises a question.

Related FGL Resources

• Uganda Tax resource centre
• Reconciling ERP Sales, EFRIS, VAT and Income Tax Returns
• EFRIS Invoices and VAT Withholding
• Ericsson AB v URA: Sales Variances
• Medisell Uganda Ltd v URA: Reconciliation Variances
• Stanbic and URA: The Transfer-Pricing Dispute

Primary Sources

• Uganda Revenue Authority: Implementation of the Domestic Taxes Taxpayer Compliance Risk Management Strategy and Compliance Improvement Plan for FY 2026/27, 7 September 2026
• Ministry of Finance: Budget Speech for Financial Year 2026/27, 11 June 2026
• Uganda Revenue Authority: Digital Tax Stamps guidance
• Uganda Revenue Authority: Local Excise Duty web returns
• Uganda Revenue Authority: EFRIS and the non-VAT taxpayer rollout

Author: Ivan Lwanga
Publication: Finance & Governance Lab
Jurisdiction: Uganda
Last substantively reviewed: 26 September 2026

This article is for general educational and informational purposes. It does not constitute tax, accounting or legal advice. Tax treatment depends on the facts, the applicable law and the relevant period. Readers should verify current official guidance and obtain professional advice before correcting returns, making disclosures or taking another material compliance step.