E-Invoicing and VAT Compliance: Evidence from Uganda’s Digital Tax Reform

• E-invoicing in Uganda led to a 43% reduction in reported purchases and a nearly 150% increase in reported VAT liabilities among affected firms.
• The increase in VAT due is mainly from reduced input VAT claims and a decline in negative VAT liabilities carried forward.
• Despite these changes, many firms still have negative VAT liabilities due to large stocks of input VAT credits.
• Firms reduced reported sales by 39%, suggesting some are suppressing sales to evade taxes.
• E-invoicing has increased the number of taxpayers filing VAT declarations, bringing new VAT payers into the tax system.

Source: wider.unu.edu

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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