The Commissioner General of Uganda Revenue Authority (URA), John Musinguzi, has pledged to push for a review of the costs of digital tax stamps.
Musinguzi said this at the launch of digital tamps on manufacturers in Uganda.
“The cost of implementing DTS is designed to be manageable and is outweighed by the benefits of improved tax compliance and the reduction of illicit trade. Our primary challenge is not the system’s expense but ensuring that all businesses comply with these necessary regulations,” he noted.
This statement counters claims from Coca-Cola Beverages’ Simon Kaheru, who argues that the costs of DTS are prohibitively high and burden manufacturers.
Since its introduction in 2019, DTS has significantly broadened Uganda’s tax base, with a notable increase in registered manufacturers and importers.
The system has been pivotal in curbing tax evasion and enhancing supply chain transparency across various sectors. However, resistance to full compliance in certain sectors continues to undermine its potential benefits.
“We have observed a significant improvement in sectors where compliance is high.” the CG noted.
URA statistics underscore that DTS not only serves as a regulatory tool but also stimulates economic activity by leveling the playing field among businesses.
During the discussion, the acting Commissioner Internal trade for the Ministry of Trade, by Zackey Kalega highlighted Government’s efforts to manage illicit trade.
“We are trying to operationalise a committee on illicit trade and we are working very closely with some of the companies I see here: BAT, UBL and others.”
Since the introduction of DTS in 2019, URA has conducted numerous workshops and training sessions to help businesses understand the importance of DTS and integrate it effectively into their operations.
Nonetheless, non-compliance remains a significant hurdle.
Agnes Ssali, Legal Director and Company Secretary for Uganda Breweries Limited emphasized the need for digitization to achieve the full potential of DTS.
“We have 65% of illicit trade in the alcohol sector, and it has been exacerbated by DTS misuse, including under declaration. Moving towards digitization is the solution.”
As Uganda continues to navigate the complexities of modernizing its tax system, the role of DTS remains crucial. The focus is now on enhancing compliance across sectors, including Kombucha products, ensuring that the benefits of DTS can be fully realized and thereby supporting Uganda’s broader economic goals.
