Government has said the digital tax stamp system will help address the challenge of tax shortfalls by Uganda Revenue Authority.
By the beginning of the financial year, government had projected to collect Shs20.6trillion locally but with the onset of the Coronavirus pandemic and its effects like the lockdown, only shs17.5 trillion was collected.
This meant that there was a shs2.9 billion shortfall in the tax revenues collected by URA.
President Museveni recently attributed tax shortfalls to leakage in terms of numbers and value noting that there was a lot of tax evasion.
However, according to the Finance Minister, Matia Kasaija, with the digital stamp system implemented by all manufacturers, the shortfall will be a story of the past.
“We have not been performing 100 percent, business people are not honest. There has been a lot of under-declaration, we are getting evidence with the Digital Stamp solution, things are changing,” Kasaija said.
“I do not want to embarrass the business people, but hitherto, they were saying we are producing one million bottles of something for example, but when we put that digital tax stamp system, now the production has gone to three million. Where are the two million coming from?”
The Finance Minister said the manufacturers have been paying tax for only one million bottles and the two million bottles were being hidden.
Uganda Revenue Authority recently said at least 84 companies producing wine, spirits , four beer manufacturers and 42 companies producing water that have not being paying taxing had joined the digital tax stamp system to become tax compliant.
Highlighting the progress of the digital tax stamp system, URA said that before September 2019, only nine spirit companies were adhering to the system whereas there was none in the wines producing category.
URA also noted that they have been able to deal with the challenge of under-declaration by manufacturers through the digital tax stamp system.
“For example, a taxpayer instead of declaring 500ml would declare 300ml. This translated into monthly under declaration. With DTS implementation, URA has been able to know the right volumes coming off production lines,” URA said in the report highlighting the performance of the digital tax stamp system.
Swiss company, SICPA was contracted by Uganda Revenue Authority to implement the Digital Tax Stamps system on behalf of government.