Businesses Urged to Embrace Financial Reconciliation for URA Compliance

Businesses in Uganda are being strongly advised to adopt robust financial reconciliation practices, a move prompted by increasing scrutiny from the Uganda Revenue Authority (URA). The URA’s latest compliance strategy for the 2026/27 financial year pinpoints several areas where discrepancies are frequently observed, particularly between customs data (ASYCUDA) and tax filings for Value Added Tax (VAT) and Income Tax. These identified gaps include inconsistencies in declared sales, stock levels, and VAT taxable values compared to excise-related figures.

The traditional approach of viewing tax as an end-of-month or end-of-quarter task is no longer sufficient. Experts emphasize that tax considerations should be woven into the fabric of daily business operations. This means integrating tax compliance into the management of sales, purchases, inventory, payroll, contracts, financing, related-party transactions, and international dealings.

The URA’s intensified focus on data-driven enforcement, leveraging digital systems and third-party information, means businesses can no longer rely on estimations or disconnected record-keeping. The Electronic Fiscal Receipting and Invoicing System (EFRIS), for instance, should not be seen as an isolated system but as an integral part of a company’s overall information management infrastructure. Proactive reconciliation helps identify and rectify errors, ensuring that reported figures accurately reflect the business’s financial reality, thereby avoiding potential penalties and fostering a stronger relationship with the tax authority.