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The Uganda Revenue Authority (URA) is enthusiastic about the use of digital tax stamps to increase domestic revenues. Despite only 13 out of the 20 products designated for digital tax stamps complying with the Local Excise Duty Act, these stamps contributed to 65% of the over UGX 1 trillion collected in the last financial year. Since 2019, the URA has incorporated this solution into its domestic revenue mobilization strategy.

The adoption of digital tax stamps to boost domestic revenue is something that the Uganda Revenue Authority (URA) is excited about. Even though only 13 of the 20 products that were meant to be digital tax stamps complied with the Local Excise Duty Act, these stamps made up 65% of the more than UGX 1 trillion that was collected in the previous fiscal year. This solution has been part of the URA’s domestic income mobilization plan since 2019.

Even when only 13 out of the 20 products supposed to carry digital tax stamps, as per the second schedule of Local Excise Duty Act, 65% of the over shs1 trillion collected in the last financial year is directly attributable to this solution.

Since 2019, the solution has been adopted as part of the domestic revenue mobilization strategy by URA.

As such, beer, soda, bottled water, wines, Spirits, tobacco products, sugar, cement, other fermented beverages, fresh juice and vegetable juice, any other non-alcoholic beverages, and cooking oil, the tax man says that the endeavor to affix digital stamps onto these products have yielded results.

Out of the 25 products in the second schedule of the Local Excise Duty Act, five of them exempted, 20 products should have digital tax stamps and only 13 of these carry the stamps.

“These contribute about 65% local of the over shs1 trillion we collected in 65% in the last financial year,” URA spokesperson, Ibrahim Bbosa says.

The trace and truck platform has however been a key cost pain point to manufacturers, and traders alike.

The URA commissioner general has been in Kikuubo business centre last week to listen to the traders’ concerns.

Bbosa says that the cost of digital tax stamps has reduced since inception and thus, there is no cause for concern.

“The cost is calculated on volumes. The price of DTS in 2019, was high but it has reduced over time. A quick example is soda where the stamp was shs55 per stamp has reduced, on soda it was shs20 it reduced to shs17, tobacco from shs50 to shs23 because usage has increased over time. “

Non-compliance with local excise duty comes with heavy penalties and thus, the tax man says that no one should fail to comply.

The amendments in the law have come with stringent penalties and they can go as high as shs10 million to shs50 million.

“These can injure your business, so it is very risky for you to dodge or tamper with the stamps. We shall implement this for the greater good of the country,” Bbosa said.

The trace and truck platform relays production and importation data for specific products in real time to both URA for tax assessment and UNBS for quality purposes.

SICPA the manufacturers of the digital tax stamps as a lead contractor by URA says that it provides this technology at the most optimal cost that should not injure the manufacturers and by extension the final consumer.

The taxman hopes to collect shs27.73 trillion in this current financial year, and such solutions are hoped to bless this goal.