” The new tax solution is part of URA’s scheme to combat illicit trade, seal revenue leakages and boost collection and increased efficiency in managing taxpayer compliance. The solution is expected to enable manufacturers, distributors, retailers and consumers to conveniently verify and trace all specified goods throughout the distribution chain.”
The implementation of the Uganda Revenue Authority Digital Tax Stamp Solution (DTSS) is set to go live soon, after the last stage of installing equipment in factories is completed.
Speaking during the launch of the taxpayers’ appreciation month for Northern Uganda, Mr Cyprian Chillanyang, the URA business policy assistant commissioner, said the implementation had already started, noting that the rollout plan, which will have its first phase implemented throughout the 2019/20 financial year, will start with water, beer, soda, juices, cigarettes and other soft drinks.
“Right now we are preparing soda and water factories to install equipment. Government has contracted a Swiss company (SICPA) that is going to put these tracking features in factories,” Mr Chillanyang said.
The new tax solution is part of URA’s scheme to combat illicit trade, seal revenue leakages and boost collection and increased efficiency in managing taxpayer compliance. The solution is expected to enable manufacturers, distributors, retailers and consumers to conveniently verify and trace all specified goods throughout the distribution chain.
In a statement, the URA Assistant Commissioner Public and Corporate Affairs, Mr. Vincent Seruma said,
“Rumours of URA suspending the implementation of the digital tax solution are false; what was communicated to the manufacturers was the change in the go live dates to allow for the completion of installation of machinery at the factories and also make sure the due process of gazetting the solution is complete. URA will notify the manufacturers and the general public through appropriate channels including a public notice on the date of implementation.” He concluded by urging stakeholders and manufacturers to embrace the digital tax stamps as it is a critical tool in the fight against illicit trade and counterfeit goods.
These digital tax stamps also improve on accountability of production and protect local manufacturers. Uganda isn’t the first in the region to embrace the digital tax stamps, it has been implemented in Tanzania, Rwanda and Kenya and they are benefiting from the solution.
The roll out of digital stamps had been delayed by the lack of resources after Parliament in May queried more than Shs103b, which URA had requested through a supplementary request to implement the system. URA was also put to task to explain why it had procured the services of SICPA without a competitive bidding process.
A section of traders and private sector players have also recently asked URA not to introduce a system that will transfer burdensome costs on an already loaded business community.
Recently, Ms Barbara
Mulwana, the Uganda Manufacturers Association chairperson, said: “We are very
disturbed about the digital tax stamps, in a way it is negative and it is going
to add to the costs of doing business.”
Digital stamps, according to URA, will address challenges of illicit trade, counterfeit products and unfair competition.
“… we want to ensure that consumers are not duped into buying fake products.” Mr Chillanyang said.
According to Uganda National Bureau of Standards, nearly 54 per cent of products on the Ugandan market are either faked or counterfeited.
URA has previously implemented tax stamping although in a version it says was too manual and became prone to forgery.