Katamu Nedinani

The Uganda Revenue Authority (URA) and manufacturers are set to rethink the implementation of the Digital Tax Stamp (DTS) strategy to eliminate loopholes.

Introduced in 2019, the stamps are a component of the broader tax administration measure of Digital Tax Solutions, a track and trace platform that shares production and importation data of excisable products immediately to URA.

The stamp is always affixed to a product. The measure was primarily introduced to increase excise duty revenue collections and curb illicit trading in such items, however, a report by the Private Sector Foundation of Uganda-PSFU pointed out strong areas of concern which have to be addressed with immediate effect.

According to the report, DTS has increased the cost of doing business in the manufacturing sector through acquiring the system infrastructure as well as operational costs.

These upfront investments have posed significant challenges for manufacturers particularly Small Medium Enterprises (SMEs) with limited capital,” reads part of the report.

Andrew Kilonzo, the Managing Director of Uganda Breweries Limited on behalf of the manufacturers, notes that they received the system with excitement, but it has proved to have a lot of challenges, especially the increase in operational costs, starting with a significant amount of buying the required equipment, the recurring purchase of the stamps which amounts to billions now.

He adds that UBL annually spends up to 20 billion shillings on DTS alone.

In response, John Musinguzi, the URA Commissioner-General, affirmed that the government is pro-manufacturing, and together with all its agencies URA inclusive, they are ready to support the sector growth in all ways possible, starting with the DTS which seems to have become a disincentive to manufacturers.

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