As Uganda Revenue Authority (URA) strives to increase the monitoring of tax compliance, manufacturers through their umbrella body, Uganda Manufacturers Association (UMA) have written to State House asking President to put on halt the installation of the digital tax stamp solution and allow them more time.
In a letter to State House dated 29 October 2019, Barbara Mulwana, the Chairman of UMA states that while manufacturers are not opposed to the implementation of the Digital Tax Stamp Solution, its members would like an extension of the implementation date announced in a public notice issued by the Ministry of Finance and Uganda Revenue Authority (URA) recently.
The Digital Tax Stamp Solution was announced to start tomorrow 1st November 2019 and according to URA, it will increase the monitoring of tax compliance by players in the beverage, alcohol and cigarettes sectors. According to the public notice issued by the Ministry of Finance and URA, manufacturers have a three-month transition period starting on 1st November 2019 to invite URA to install equipment at their factories.
However, manufacturers do not seem willing to cooperate with URA on the digital stamps solution, going by UMA’s letter to State House.
“We appreciate the importance of digital stamp solution but given our contribution in tax to Government, we would like to ask the President for an extension from the date announced in a public notice issued by the ministry of finance and Uganda Revenue Authority. We seek for urgent audience with the President before Friday where we want him to announce publicly that the government will take care of all costs associated with the installation of Digital Stamps Solution,” Mulwana’s letter to State House reads in part.
It is anticipated that implementation of the stamps on selected products will help eliminate substandard products in the local market, put in place traceability mechanism and enhance revenue collection.
URA has installed on the excisable goods, management systems in production lines at a number of factories that belong to members of UMA including Harris International, Mukwano and Coca-Cola to monitor usage of digital stamps.
The Digital stamp solution according to URA is the latest method to have a clear view of how much tax should be expected from what is being produced.
Uganda becomes the 4th country in the region to take on the solution after Rwanda, Kenya and Tanzania adopted digital tax stamps solution and reported success in increased tax collection and immense reduction of counterfeit goods on the market.