Uganda tax collector aims salvo at illicit goods with digital stamps

April 15, 2019 in Business, Companies, Policy, Trade & Industry by Editor

In a phased approach, URA will start with cigarettes/tobacco products in May, liquor (including spirits, beers and wines) beginning July, sodas in August and water in September 2019.

April 15—Segments of the small business community in Kampala have not taken too kindly to the proposed implementation of the new Digital Tracking Solutions (DTS) policy which involves compulsory use of digital stamps for gazetted goods.

First mooted last year, David Bahati, a junior finance minister said in November, “Fake goods are not supposed to be in our economy so we cannot legitimize them by increasing taxes on them or reducing taxes on the genuine ones. We are going to make sure they do not enter the market.”

Uganda is also catching up with other East African Community member states in adopting DTS, already in use in Kenya, Rwanda and Tanzania.

In a phased approach, the Uganda Revenue Authority (URA) will start with cigarettes/tobacco products in May, liquor (including spirits, beers and wines) beginning July, sodas in August and water in September 2019.

However a URA official told 256BN those complaining the loudest are usually the same people involved in unethical business practices like making counterfeit products for gullible consumers. Repacking and printing of false labeling is common.

A considerable percentage of Uganda’s traded goods are made up of illicit products. With pressure from the government and manufacturers, URA wants to limit this estimated annual UGX 10 billion ($2.6 million) business as well as protect consumers from possibly harmful items. Other sources however say this figure is on the conservative side and no one really knows the actual turnover.

Flare Musiime Bakanga, the Change Leader Digital Tracking Solutions Project, URA said recently, “We are working with Uganda National Bureau of Standards (UNBS) to ensure that only legitimate and original goods are traded on the Ugandan market. With the new DTS, we will be able to track down goods that invade the certification processes.”

URA has already put in place a consumer engagement platform that will enable consumers to use an application on their smart phones to check the goods.

URA has contracted Sicpa (Uganda) to produce the stamps and ensure accountability. Manufacturers and importers are required to register on the URA DTS system where an account will be created for each company. The company will then forecast the quantity of stamps it will require for a certain period of time and then make an order from Sicpa (Uganda).

For imported goods, stamps will be attached from the country of origin while the locally produced goods will be stamped at a designated place at the manufacturing facility.

Bakanga said, “We urge the consumers to look out for these stamps on the gazetted products before buying and consuming them. This will also help us in controlling tax evasion.”