Dust has yet again been raised by manufacturers on the controversial digital tax stamps whose implementation is expected to start next month.
A notice published by Uganda Revenue Authority (URA) revealed that the tax agency intends to kick off implementation of the digital tax stamps a few days from now.
“Effective 1 November 2019, all the above products whether locally manufactured or imported shall be affixed with digital tax stamps,” the notice reads in part, highlighting products such as beer, soda, spirits, wines, mineral water and tobacco products.
URA also asked manufacturers to ensure all premises for manufacturing and packaging the goods are registered for Excise Duty.
Digital Tax Stamps equipment, URA said, shall be installed at registered premises of manufacturers and those without automated production lines will be required to have adequate space and tools to facilitate inputting and activating Digital Tax Stamps in those products at their registered premises.
URA warned that those who fail to abide by the law, will attract the higher alternative between a penal tax, equivalent to double the tax due on the goods or Shs50m.
Manufacturers, importers, distributors among others have an ultimatum of November 1 until January 31, 2020 to account for any gazetted good without Digital Tax Stamps.
In response, manufacturers on Thursday wrote a letter to Trade Minister Amelia Kyambadde, seeking government’s commitment to cover the cost of implementing Digital Tax Stamps.
“…the affected members would wish to have unequivocal confirmation from government indicating that government shall pay for the costs associated with the implementation,” the letter read in part adding that government prevail over URA not to victimize Uganda Manufacturers Association(UMA) members opposed to Digital Tax Stamps while granting facilities such as Withholding Tax exemptions.
The manufacturers also noted that government’s seeming lack of cohesion was resulting into unending tensions with URA which consequentially undermines investor confidence.
UMA also addressed its discomfort with URA’s issuance of ultimatums, noting there was need to reach a properly harmonised position on a number of concerns.
Mr Jim Mugunga, the Privatization Unit, Ministry of Finance senior public relation officer, told Daily Monitor various consultative meetings had held between all affected parties for a harmonised way forward.
While manufacturers argue that Digital Tax Stamps will increase the cost of production, URA says the stamps will curtail counterfeiting which also benefits manufacturers.
Cost to be borne by manufacturer
According to Mr Vincent Seruma, the URA head of public and corporate affairs, at the weekend said manufacturers will have to foot the bill of the Digital Tax Stamps.
“This is a cost that will be born in principle by the manufacturers,” he said.
However, there was a proposal for government to cover the costs on behalf of the manufacturers at the beginning of implementation.
Mr Seruma referred Daily Monitor to the Finance Ministry. However, efforts to get a clear understanding of the matter were futile at Finance Minister Matia Kasaija’s known telephone contacts were unavailable by press time.