By Mulengera Reporters
The Uganda Revenue Authority (URA) has stepped up pressure on Kampala City landlords to embrace the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), following a decline in rental income tax revenue despite continued growth in Uganda’s real estate sector.
The call was made during a high-level engagement between URA leadership and some of Kampala’s prominent property owners and their representatives at Mestil Hotel Nsambya, where the two sides discussed persistent compliance gaps and the stagnation of rental income tax collections.
Commissioner of the Domestic Tax Department, Denis Kugonza Kateeba, said the engagement followed the discovery of recurring compliance challenges in the sector, including inaccurate declarations of rental income, invalid tax claims and failure to issue receipts to tenants.
“We appreciate those who have invested in EFRIS, embraced it and consistently complied,” Kugonza said, noting that proper use of the system makes tax administration easier for both taxpayers and URA.
He reminded landlords that issuing the required receipts is a legal obligation and not an optional practice.
“EFRIS must match the actual tenancy agreement and rental account amount, and receipts must be issued under the correct landlord’s entity. Declared income must also align with all EFRIS receipt records,” Kugonza said.
The URA warning comes as rental income tax collections move in the opposite direction from the broader performance of major tax heads.
URA Commissioner General John R. Musinguzi said real estate now contributes about six to seven percent of Uganda’s Gross Domestic Product (GDP) and is among the fastest-growing sectors of the economy, expanding by about seven percent.
However, he said the sector’s growth has not translated into corresponding growth in rental income tax revenue.
“While every other major tax head grew by double digits in the 2025/2026 financial year, averaging 14 percent growth, rental income tax actually declined by one percent,” Musinguzi said.
He said EFRIS would help address some of the compliance gaps by improving the accuracy and traceability of rental transactions.
Musinguzi warned that failure to issue EFRIS invoices, understating rental income and failing to file tax returns constitute violations of the law.
He also linked improved tax compliance to Uganda’s wider fiscal challenges, noting that the country’s tax-to-GDP ratio stands at 14.3 percent while debt servicing consumes about 40 percent of annual revenue collected.
“It is futile to dodge taxes yet the country is sinking further into debts,” Musinguzi said.
The landlords, however, signalled willingness to work with the tax authority rather than wait for enforcement measures.
Speaking on behalf of property owners, the chairman of landlords and property owners, Ambassador Godfrey Kirumira, acknowledged that EFRIS is not a new tax but an electronic mechanism intended to strengthen tax administration.
“We accept that rental tax, like other sectors, must adapt to digital tax administration and, as the business community, we shall voluntarily participate in this transition rather than wait for enforcement to comply,” Kirumira said.
URA said it will dedicate a technical team to support landlords in adopting EFRIS and resolving challenges that may arise during the transition.
The engagement therefore marks a renewed push by the tax authority to close compliance gaps in the property sector as it seeks to bring rental income tax collections back in line with the growth of Uganda’s real estate industry. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
