President Museveni has backed the implementation of digital tax stamps on goods manufactured in the country.
Since November 1, Ugandan Revenue Authority implemented the digital stamp system where machines are installed at factories to help the tax body tell in real-time the production capacity to estimate tax revenue collection but the move has met stiff resistance from manufacturers.
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Speaking at the African Tax Administration Forum, Museveni told the tax collectors from across Africa that the new move to monitor the production lines of manufacturing companies will help reduce leakages and increase revenue from taxes
“There was a big leakage in terms of numbers and value. In Uganda, there was a lot of tax evasion” Museveni lamented to the tax officials.
A new move by the Uganda Revenue Authority that started on November 1 will see manufacturers of sodas, beers, bottled water, cigarettes, wines and spirits place digital tax stamps on their products.
The stamps, placed on top of the product are applied from an in-house computer whose servers are accessible to both URA and the manufacturers.
URA is aiming at closing a four trillion shillings gap that is lost in under-declarations.
The stamps are also hailed as innovative in guaranteeing product authenticity.
“I know Ugandans very well, when they earn, they go to a bar and they will indirectly pay those taxes when they drink” Museveni added.
The President’s message was given in a veiled response to manufacturers who had petitioned him asking for the implementation of the solution to be stayed.
Uganda is the third country after Kenya and Tanzania to implement digital tax stamps.
The Alcohol Association of Uganda, Nile Breweries and 38 other manufacturers had filed an application before the court seeking to have the implementation of the digital tax stamps halted until the main suit in which they challenge the stamps is disposed of but they were dealt a big blow when the civil division of the High Court in Kampala threw out their application.
“For a temporary injunction to be granted, court should have evidence that the applicant would suffer an irreparable injury which damages would not be capable of atoning if the temporary injunction is denied and status quo not maintained. There should be proof that the balance of convenience is in the favour of the application,”Ssekaana said early this month.
“The circumstances of the case are that the minister of finance made regulations which have come into effect and it is the duty of every citizen to comply with the law until the court declares it unconstitutional or invalid,” Ssekaana said.
