Since they came into effect on November 1, 2019 , digital stamps have met stiff resistance from manufacturers but they were given a grace period up to January 31 which elapsed on Friday.
However, in a reminder, the tax body has warned of heavy fines to manufacturers who fail to implement the digital stamp system after elapse of the grace period.
“Notice is hereby given to all manufacturers or importers of products that were gazetted for Digital Tax Stamps including – soda, beer, spirits, wine, mineral water and tobacco products (including cigarettes) that the deadline for the transitional period is 31st January 2020. During this transition period from 1st November 2019 to 31st January 2020, every manufacturer, importer, distributor, agent or trader dealing in any of the gazetted goods is required to account for any stock of goods not bearing a Digital Tax Stamp to URA,” the URA notice reads in part.
The tax body warns that all manufacturers and importers of the gazette goods were required to have submitted information necessary for registration of the digital stamps by January 31 and that their(URA) field inspectors will be on the lookout for any gazetted goods not bearing the digital tax stamps for immediate seizure and application of the necessary sanctions.
“Please note that a person who fails to affix a tax stamp on any gazetted product or found in possession of any gazetted product not bearing a tax stamp is liable to pay a penal tax equivalent to double the tax due on the goods or fifty million shillings, whichever is higher.”
URA has also asked the public to take note of the deadlines attached to having products on their shelves without digital tax stamps.
Meanwhile, the tax body has listed a total of only 27 manufacturers and importers who have already completed their registration for the use of the digital tax stamp system.
Of 27, only 11 importers have completed their registration and are ready to commence affixation of the digital stamps on to their imported products before taking them to the market.
Digital Stamp System
According to the Public and Corporate affairs manager at URA, Ian Rumanyika, the Digital Stamp System is a tax administration solution built upon a scalable technology platform that integrates tools, devices and software.
“The system will enable the marking, tracking, tracing, inspection and verification of excisable products throughout their lifecycle, thereby allowing URA to monitor and control the production, import, export, and distribution of these goods in Uganda, “Rumanyika says.
“The DTSS will serve as an objective, verifiable source of data about production and importation volumes and inspection and public verification activities taking place in the market. This data will be used by URA to ensure and verify the full and fair taxation of all excisable products. By addressing illicit trade and under-declaration, the DTSS will support URA in closing the existing gap in excise tax collection.”
He adds that the consumer will be in position to authenticate the digital tax stamps applied on products and to verify the genuine products anywhere by using the Kakasa URA mobile App which is being tested and will be unveiled soon.