KAMPALA — Uganda Revenue Authority (URA) Commissioner General John R Musinguzi has commended businessman Sudhir Ruparelia for embracing electronic tax invoicing, citing him among property developers who have adopted the authority’s electronic tax reporting requirements.
Mr Musinguzi made the remarks during an engagement between URA and city landlords aimed at addressing a decline in rental income tax collections and improving compliance in the real estate sector.
He said the sector plays a significant role in Uganda’s economy, contributing an estimated six to seven per cent of Gross Domestic Product (GDP), while supporting employment, manufacturing and financial services.
“Despite this significance and growth, the compliance levels are dropping. Last financial year, all taxes grew by double digit with an average growth of about 14 per cent, but the rental income tax head declined by one per cent,” Mr Musinguzi said.
He said the meeting was intended to understand the factors behind the decline and develop solutions with property owners rather than focus primarily on penalties.
“The purpose for this meeting was to have a candid conversation, rectify the decline and look at what is happening in this sector, not to apportion blame, penalise or victimise each other,” he said.
Mr Musinguzi singled out Mr Ruparelia for adopting the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), a system used by URA to digitally record and track business transactions.
“We appreciate the pioneers that have embraced the usage of EFRIS like Dr Sudhir Ruparelia,” he said.
EFRIS requires businesses covered by the system to issue electronic invoices or receipts for applicable transactions. URA has been encouraging landlords and other businesses to use the system as part of efforts to improve the accuracy of tax records.
Mr Ruparelia’s recognition comes amid his group’s continued operations in Uganda’s property and hospitality sectors, including its commercial property portfolio in Kampala.
One of the group’s developments, RR Pearl Tower One on Yusuf Lule Road, also houses several URA offices.
Several URA departments moved from the authority’s Nakawa headquarters to the building in 2025, including the Large Taxpayers Office, Public Sector and Medium Taxpayer divisions, Risk and Strategy Department and Petroleum Division.
On September 7, 2026, URA also relocated its Real Estate Tax Office to the ninth floor of RR Pearl Tower One, saying the move was intended to improve access to real estate tax services.
The arrangement means the tax authority is also a tenant in premises owned by a property group operating within the sector it regulates.
URA has defended its decision to occupy additional office space at the building, citing expansion and the need to bring services closer to taxpayers.
There have also been differing reports about the cost of the tenancy. Some reports have put the annual rental expenditure at about Shs18 billion, while URA has disputed figures circulating publicly and said the procurement process was conducted competitively and in line with procurement requirements.
Mr Musinguzi urged landlords to work with URA to improve compliance and offered technical support to property owners seeking to adopt EFRIS.
“If we agree today and work together on the front of compliance, URA will dedicate a team to support you on EFRIS onboarding and provide written guidance and physical engagements to support you in regards to EFRIS,” he said.
He also asked landlords to designate personnel responsible for tax matters and ensure tenants receive electronic receipts showing the actual rent paid.
“We require a dedicated person to exchange notes on the side of the landlords. Boldly and frankly issue those EFRIS receipts to your tenants. Where there’s compliance, there are benefits,” Mr Musinguzi said.
URA has also advised tenants to demand EFRIS receipts from landlords because the records can support rental expense claims and, where applicable, input tax claims for VAT-registered businesses.
The Commissioner General said both taxpayers and the authority had responsibilities in improving revenue collection, while concerns about tax policy should be addressed through dialogue.
He cited concerns raised by landlords over the treatment and capping of allowable expenses and tax rates.
“I listened carefully to all submissions, for example Mr Ddumba who raised about the capping of expenses, unfavourable rates among others. We all need to work together to work with the law to curb non-compliance,” he said.
Mr Musinguzi said Uganda’s tax-to-GDP ratio currently stands at about 14 per cent, which he said needed to increase to support government expenditure and debt obligations.
“Our tax to GDP is now at 14 percent, debt burden has increased with 40 percent of what is collected used to service the debt. It’s time we work together and improve our tax to GDP. Our target is to increase the tax to GDP to at least 25 percent in the short term, with the real sector being a strong pillar in mobilisation through the use of EFRIS,” he said.
He said URA was prepared to consider concerns raised by landlords regarding existing tax policies, including the treatment and capping of allowable expenses.
“There may be a need to apply a change in policy, but we must have a platform to negotiate. The sooner we work together to improve compliance in this sector, the quicker we shall be closing the gap identified, for example capping from 50 percent to 70 percent,” he said.
Mr Musinguzi warned that URA would enforce the law where voluntary compliance fails, but said enforcement would not be the authority’s preferred first step.
“When dialogue does not work, then enforcement comes into play. However, it will never be our first priority,” he said.
He also said no landlord had been prosecuted for false declaration of rental income during his tenure as Commissioner General, while reminding property owners that the Tax Procedures Code Act provides for action where taxpayers fail to meet their obligations.
The engagement brought together URA management, city landlords, representatives of the landlords’ association, KACITA Patron Ambassador Godfrey Kirumira, Mr Ruparelia and other stakeholders.
The discussions focused on improving rental income tax compliance while allowing property owners to raise concerns about tax administration and policy.