MPs on Finance Committee Advocate for Increased DTS Compliance

The URA Commissioner General John Musinguzi Rujooki recently allayed the fears of manufacturers, urging that DTS support the sector by eliminating unfair competition for compliant businesses.

Legislators sitting on the Finance Committee of Parliament have called upon Ugandan Manufacturers to comply with the taxation regime while they engage with the central government regarding their concerns in the production sector.

The pledge was made by Amos Kankunda, the chairperson of the committee during an engagement with manufacturers representatives and members of the Private Sector Foundation (PSFU) led by Dr Julius Byaruhanga.

Dr Byaruhanga and group appeared before the committee to deliver a report on the impact of Digital Tax Stamps (DTS) on the manufacturing sector.

During his presentation, Dr Byaruhanga decried the discriminatory application of the DTS, urging that such a vice is causing an increase in illicit trade since Uganda is a price-sensitive market.

“Our market is highly price sensitive. If you visit any small local bar, you will find that 95% of the alcoholic drinks can’t be traced; they aren’t tax compliant and don’t have labels of alcoholic content,” he said.

He added that Members of the manufacturing sector “have consistently expressed their support for the Government efforts in implementing DTS equitably to eliminate competition challenges.”

On his part, Mr Allan Ssenyondwa, the Director of Advocacy at the Uganda Manufacturers Association (UMA) said the Government should revise the way these solutions like DTS work so that it helps in reducing the challenge of illicit trade and manufacturing.

“How can we increase industries to be more productive; these issues of DTS albeit they are good, you should make them cheap so that the rest of the country can invest in the manufacturing sector,” he said.

The chairperson of the House Committee on Finance Mr Kankunda pledged to have the issues put before them and compile a solid report that will be put before the Parliament to inform the next course of direction.

DTS was introduced during the 2019/20 financial year as part of the Domestic Revenue Mobilization Strategy to address revenue leakages.

Earlier this year, during an engagement with PSFU, the Uganda Revenue Authority (URA) raised concerns about non-compliance with DTS and highlighted the risks associated with illicit trade.

The URA Commissioner General John Musinguzi Rujooki recently allayed the fears of manufacturers, urging that DTS support the sector by eliminating unfair competition for compliant businesses.

Regarding the costs of the stamps, Rujoki said these ( costs) would decrease with an increase in usage.

In Uganda, the use of DTS was rolled out in the Financial Year 2019/20 following the launch of the Domestic Revenue Mobilization Strategy by the Finance Ministry. DTS was also aimed at addressing revenue leakages.