What does an unregistered supplier really cost you?
If you are VAT-registered and sell to VAT-registered customers, the VAT on your purchases is money you get back — but only when your supplier is VAT-registered too. Put in your numbers and see the difference in shillings.
Your purchase
Assumes you are VAT-registered, your customer is VAT-registered, and the supplier's price is the same either way. VAT rate: 18%.
✓ Supplier is VAT-registered
They give you a proper EFRIS tax invoice.
| True cost of goods (VAT removed) | — |
| Input VAT you claim back | — |
| You sell at (before VAT) | — |
| VAT you remit to URA | — |
| Your profit | — |
✗ Supplier is NOT registered
No tax invoice — no input VAT to claim.
| True cost of goods (all of it) | — |
| Input VAT you claim back | UGX 0 |
| You sell at (before VAT, same price) | — |
| VAT you remit to URA | — |
| Your profit | — |
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Why this happens, in one paragraph
VAT is designed to flow through registered businesses without sticking. When a registered supplier charges you VAT, that VAT is a deposit you recover from URA against the VAT you collect on your own sales. An unregistered supplier charges you a price with no recoverable VAT in it — so 18/118 of every shilling you pay them (about 15.3%) becomes a cost that stays with you, silently eaten out of your margin. Your customer notices nothing; your profit takes the whole hit.
Three practical rules
- Same price? Registered wins — always. An unregistered supplier must be more than ~15.3% cheaper before the maths even begins to argue for them.
- Above UGX 5M, there's a second trap: a single purchase of UGX 5M+ from a supplier with no TIN is disallowed as an expense for income tax — you lose the deduction on top of the VAT.
- Your input VAT claims are only as good as the invoice. "He'll send the invoice later" is how claims bounce and audits start. EFRIS invoice at the moment of purchase, or the price isn't the price.
General information, verified July 2026. The calculation assumes standard-rated supplies at 18% and full input-credit eligibility. Mixed, exempt or zero-rated supplies change the answer — that's a conversation, and the first one is free.
Leaking VAT you can't see? That's what the Tax Health Check finds.
Suppliers, input claims, EFRIS reconciliation — we read your VAT position the way URA will, and tell you in plain language.