Sugar, Cement added on the list of goods mandated to have digital stamps

The government of Uganda has added sugar and cement on the list of goods that are mandated to have digital stamps effective April 1, 2021.

A public notice issued by Uganda Revenue Authority (URA) states: “The General Public is hereby notified that in addition to Beer, Soda, Spirits, Wines, Mineral water and Tobacco products, the Minister of Finance, Planning and Economic Development has gazetted the following products to be affixed with Digital Tax Stamps: 1. Cement 2. Sugar

“Effective 1st April 2021, all Cement and Sugar whether locally manufactured or imported into Uganda shall be affixed with Digital Tax Stamps.”

The Digital Tax Stamp is a mark or label applied to goods and their packaging and contains security features and codes to prevent counterfeiting of goods through its trace and track capabilities. 

URA spells the parameters for implementing the provision. They include:

1. All premises for manufacture or packaging of the above gazetted goods shall be registered for Excise Duty in accordance with the Excise Duty Act;

2. Manufacturers and importers of the above goods are required to have adequate space and tools to facilitate affixing and activating the digital tax stamps on these products at their registered premises.

3. The transitional period of 1st April 2021 to 31st May 2021 has been granted during which every manufacturer, importer, distributor, agent or trader of sugar or cement shall be required to deplete all the unstamped goods.

4. A taxpayer who fails to affix a tax stamp on goods is liable to pay a penal tax equivalent to double the tax due on goods or fifty million shillings (UGX50 million), whichever is higher.

Manufacturers engaged

URA yesterday engaged manufactures of sugar and cement ahead of the preparation for the implementation of the Digital Tax Stamps (DTS), for the goods, set for 1st April 2021 which has also been demarcated as the “Go live date”.  

Present in the meeting were representatives from Bwendero Dairy Farm, Tororo Cement, Victoria Sugar Limited, Kakira Sugar, National Cement, UFCIL, Hoima Sugar Ltd, Busia Sugar, SCOUL and Atyak Sugar factory.

The implementation will ride over a two months’ period from 1st April to 1st June 2021 even though the notices for stamp fees for sugar and cement and their manner of fixation were gazzetted on 1st January 2021. Each 50kg bag of cement will have a stamp bought at UGX 135, bulk cement will pay UGX 60,000 per truck while each bag of sugar will have a stamp worth UGX 39. 

The Government of Uganda moved to implement Digital Tax Stamps with a focus on Local Excise Duty. DTS is a technology solution that was sought to aid tax administration while mitigating revenue losses and deterring existing deficiencies in the tracking and tracing of locally manufactured and imported products which had contributed to less than adequate tax receipts from the manufacturing sector as well as the importation of excise-able products. 

URA which has positioned itself as a business facilitation partner to all its stakeholders and will continue to sensitize and engage the manufacturers to foster adoption and implementation of the solution.