On Monday, 7 September 2026, the Uganda Revenue Authority (URA) issued a public notice on the implementation of its Domestic Taxes Taxpayer Compliance Risk Management Strategy and Compliance Improvement Plan (CIP) for FY 2026/27. In a single table, URA listed the 22 compliance risks it will pay particular attention to this year.
We think that is good news, not bad news. An audit is far less unsettling when you already know what the auditor is looking for. So at Frankmar we have read the list closely, and rather than simply repeat it, we have turned it into something you can act on: five practical "control gates", a month-end routine, and a checklist that pairs every risk with the one document that protects you.
This applies to all businesses: small trader, manufacturer, service firm or group company alike. The only thing that changes is which of the 22 items bite hardest for your line of work.
The one idea behind all 22: your numbers must agree with each other
Read the list slowly and a pattern appears. Very few of these risks turn on a hard point of law. Almost all of them are about the same figure being reported differently in two places: customs against VAT, VAT against excise, stamps against production, EFRIS against physical stock, this year's opening equity against last year's closing equity.
Here is the part many businesses miss: URA already holds customs (ASYCUDA), VAT, excise (LED), income tax, EFRIS and Digital Tax Stamp (DTS) data in the same systems. A computer can flag a mismatch long before a human officer ever opens your file. In Uganda, tax compliance has quietly become a data-consistency exercise. With a domestic revenue target of roughly Shs 40 trillion this financial year, URA has every reason to run those checks hard.
The takeaway is simple:
When the tax authority tells you exactly what it is looking for, look for it yourself first.
The 22 risks, grouped into five Frankmar "control gates"
To make the list manageable, we group URA's 22 items into five gates: the five places where mismatches are actually created inside a business. Fix the gate and you fix several risks at once.
Gate 1 The Stockroom
URA items 1, 2, 3, 4, 12, 13, 17, 20The biggest group, aimed mainly at manufacturers, traders and dealers in excisable goods. It covers opening/closing stock variances in LED returns, overstated damages, stock differences between the trading account and the balance sheet, over-claimed excise on converted goods, stock levels that cannot support declared sales, unusual input-to-output ratios, VAT values that differ from LED-derived excise-inclusive values, and DTS-stamped quantities that do not match sales or production. If your production ratios look unusual, be ready to show where the extra inputs went.
Gate 2 The Border & the Till
URA items 5, 11, 19Exports must reconcile across customs (ASYCUDA), VAT and income tax. Alongside this, URA is watching non-issuance of EFRIS receipts and weak EFRIS usage. EFRIS is no longer just a receipting tool: it is a data source URA tests your returns against.
Gate 3 The Ledger
URA items 6, 7, 9, 10, 21Financial-statement integrity: overstated cost of sales, overstated trade payables, retained earnings brought forward that do not agree with last year's closing figure, expenses claimed on assets that are not on the balance sheet, and large unexplained amounts parked under "Other expenses". A big, unclassified "Other expenses" line is effectively an invitation to ask questions.
Gate 4 The Payroll
URA items 8, 14Employers operating without PAYE registration, and PAYE under-declared by secondary employers. Consultants, part-time staff and directors paid by more than one entity deserve a second look.
Gate 5 The Group & the Border-crossing Payment
URA items 15, 16, 18, 22Related-party and cross-border transactions: mispricing of related-party goods, excessive related-party payments, and undeclared withholding tax (WHT) on international/foreign transactions and on professional and management fees. This is where a single intercompany invoice can create exposure on two fronts at once (see the spotlight below).
The Frankmar Control Table: all 22 risks, paired with your fix
This is our own table, derived from URA's notice. For each risk we show the mismatch URA can run automatically and the one control (and piece of evidence) that keeps you safe. Treat the last column as your checklist.
| # | URA risk area | The mismatch URA can run | Your control & evidence to keep |
|---|---|---|---|
| 1 | Opening/closing stock variances in LED returns | Month-on-month LED stock movements that don't tie | Reconcile LED stock to physical counts; keep stock cards & count sheets |
| 2 | Overstated damages in LED returns | Damage claims high vs sector/history | Approve & document every write-off; keep disposal/destruction evidence |
| 3 | Stock variance: trading account vs balance sheet | Closing stock in P&L ≠ stock in balance sheet | Tie the trading account to the balance sheet before filing |
| 4 | Over-claimed excise on converted excisable goods | Excise claimed exceeds goods actually converted | Keep conversion/production records supporting each excise claim |
| 5 | ASYCUDA exports differ from VAT exports | Customs export values ≠ VAT return exports | Reconcile ASYCUDA to VAT monthly; log every reconciling item |
| 6 | Overstated cost of sales | COS out of line with purchases/margins | Support COS with purchase records; review gross-margin trend |
| 7 | Inconsistent retained earnings brought forward | Opening equity ≠ prior-year audited closing | Roll forward equity; document any prior-year adjustments |
| 8 | Employers not registered for PAYE | Staff costs present but no PAYE account | Register for PAYE; confirm all payrolled staff are captured |
| 9 | Overstated trade payables | Payables balance unsupported by supplier records | Reconcile payables to supplier statements; clear stale balances |
| 10 | Expenses on assets not on the balance sheet | Fuel/repairs/insurance on assets you don't own | Match claimed expenses to the fixed-asset register |
| 11 | ASYCUDA exports differ from income tax sales | Customs exports ≠ sales in the income tax return | Reconcile exports across customs, VAT and income tax |
| 12 | Stock levels can't support declared sales | Sales too high for the stock on record | Ensure stock records can account for reported sales volumes |
| 13 | High manufacturer input-output ratios | Inputs high relative to outputs vs sector norm | Track yield/wastage; be ready to explain where inputs went |
| 14 | Under-declared PAYE by secondary employers | Second-job/director pay not fully taxed | Capture all employers; apply correct PAYE on secondary income |
| 15 | Mispricing of related-party goods | Group purchase/sale prices off arm's length | Keep a current transfer-pricing analysis for related-party goods |
| 16 | Undeclared WHT on international/foreign transactions | Foreign payments made without WHT | Deduct & remit WHT on time; support any treaty relief |
| 17 | VAT value ≠ LED-derived excise-inclusive value | VAT taxable value inconsistent with excise value | Align VAT taxable values with LED/excise workings |
| 18 | Undeclared WHT on professional & management fees | Service fees paid without WHT | Withhold on professional/management fees; keep proof of payment |
| 19 | Non-issuance of EFRIS receipts / weak EFRIS use | Sales without EFRIS receipts; EFRIS ≠ returns | Receipt every sale on EFRIS; align EFRIS stock with physical stock |
| 20 | DTS-stamped quantities ≠ declared sales/production | Digital Tax Stamp counts don't match output | Reconcile DTS activations to production and sales |
| 21 | Unclassified amounts under "Other expenses" | Large "Other expenses" line in the return | Break "Other expenses" into proper classifications |
| 22 | Excessive related-party payments | Management fees/royalties shifting profit out | Evidence services were received; keep intercompany agreements |
Your month-end reconciliation routine
Most of these risks are not signs of evasion. They usually come from finance teams preparing each return in isolation: different people, different cut-off dates, different spreadsheets. The fix is less about tax technicality and more about a monthly routine where the numbers are made to agree before anything is filed. What follows should run every month-end, scaled to the nature of your business (a manufacturer will lean on the stock and excise steps; a service firm on payroll and WHT).
- Reconcile before you file: tie VAT sales to income-tax sales, ASYCUDA exports to both, and LED values to VAT values. Keep a note of every reconciling item.
- Clean up stock: count it, tie the trading account to the balance sheet, and keep evidence for every damage claim and write-off.
- Roll forward your equity: confirm retained earnings brought forward agree with last year's audited closing figure.
- Break up "Other expenses" into proper classifications in the return.
- Match your fixed-asset register to the expenses you claim on assets.
- Review payroll: PAYE registration, and anyone with more than one employer.
- Review intercompany flows for transfer-pricing support, evidence of benefit, and WHT.
- Check EFRIS: every sale receipted, and EFRIS stock aligned with physical stock.
Related-party and cross-border payments (items 15, 16, 18, 22)
These deserve special care because one intercompany invoice can create exposure on two fronts at once: URA can question whether the charge is deductible at all, and separately whether WHT was withheld and paid on it. Before URA asks, we would want clear answers to four questions:
- Is there a written intercompany agreement, and does what actually happens match it?
- Can you show the services were received and benefited the Ugandan entity (reports, emails, deliverables, timesheets), not just an invoice?
- Is there a current transfer-pricing analysis supporting the price or mark-up?
- Was WHT deducted and paid on time, and is any treaty relief properly supported?
What Frankmar would do this quarter
The notice itself encourages taxpayers to review their records, systems and internal controls, and asks those selected for interventions or audit to cooperate. We read that as fair warning and a fair opportunity. An internal review now costs a fraction of what penalties, interest and months of management time will cost after an audit finding. And if you find errors, correcting them on your own terms is almost always better than having them found for you.
URA has shown its hand for FY 2026/27. The businesses that do well this year will be the ones that treat the 22 items as a checklist, not a threat. If you would like a second pair of eyes, our team can run a focused compliance health-check against this exact list, help you build the month-end reconciliation routine into your finance function, and support your team through our Advisory & Training service so the controls stick.
Talk to us
Frankmar Associates · Plot 4 Kiwana Road, Bukoto Church Street Mall, Kampala
+256 769 285 096 · kafrankmar2014@gmail.com
Disclaimer: This Insight is derived from URA's public notice of 7 September 2026. Please seek advice specific to your circumstances before acting.
