Tax body, Uganda Revenue Authority has said it has resumed enforcement of the digital tax stamps following the “expiry” of an interim order stopping from so.
The High Court in Kampala last week issued an interim order asking to halt the enforcement of the digital tax stamps until yesterday, Tuesday, February 4, when the main application was heard inter parties.
On Tuesday, the Court rejected pleas by the tax body to strike down the injunction lodged by one Sylvester Kamuli that stopped URA from implementing the February 1 deadline for all excisable goods to bear digital tax stamps but according to Ian Rumanyika, the Public and Corporate Affairs Manager at URA, they are resuming implementation of the tax stamps.
The interim order issued on Friday, January 31, 2020 expired on February, 4, 2020 and court declined to renew it. The clear position is that there is no standing court order whatsoever stopping the implementation and our enforcement measures and so shall proceed as earlier communicated,”Rumanyika said in a statement.
When contacted for a comment about the matter, Fred Muwema, the lawyer for Kamuli said the tax body’s implementation and enforcement of the digital tax system should only be done in accordance with the court’s guidance on the matter.
“The so called enforcement that URA says it wants to take is subject to court’s direction through yesterday’s directive because whatever they (URA) do has got to comply with the court’s directives. Besides, we were only against the enforcement of the deadline,”Muwema told the Nile Post.
He insisted that URA has no locus to start arresting consumers of goods without digital tax stamps because the tax body itself knows that not all manufacturers have implemented the stamps.
“How can you say you are going to impose a fine of shs50 million on consumers yet you know that all goods don’t have stamps? This is the very reason our client on behalf of the consumers went to court to say it is a violation of the consumers rights to be able to access their basic needs,”Muwema noted.
Digital tax stamps
The move by the Uganda Revenue Authority 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 insists that this is aimed at closing a four trillion shillings gap that is lost in under-declarations.
Uganda is the third country after Kenya and Tanzania to implement digital tax stamps.