Parliament to investigate digital tax stamps

Wednesday November 6 2019


By Moses Kyeyune

The Speaker of Parliament Rebecca Kadaga has instructed the House Committee on Finance Planning and Economic Development to conduct an inquiry into the injustices created by digital stamps.
The directive issued during the House sitting Wednesday followed a petition by a section of traders and consumers dealing in beverages.

The Speaker asked the Committee to expedite their inquest into the matter.
“During the Budget process, this House rejected the request for funding that project. Let us ask the committee on Finance to examine that petition and come to us with the report,” she said.

The traders, in a petition delivered by Mr Gideon Onyango (Indep, Samia Bugwe North) implored Parliament to halt the digital tax stamp project, which they said are discriminatory and subjects them to multiple taxes.

“Your humble petitioners pray that the Committee investigates the cost of the stamps, the selective method of implementation and mechanisms to bring the informal sector to taxable capacity prior to implementation of tax measures,” reads the petition in part.

The traders also contend that “the Digital Tax Stamps will increase cost of production and will put legitimate manufacturers out of business and yet little has been done to bring the informal sector into the formal sector. This presents a further risk of ordinary Ugandans resorting to illegal products that are less expensive and which can expose them to health risks.”

For instance, they cite the disparities of taxes levied on beverages using the digital stamp, despite the presence of the excise duty and value added tax among other revenue measures approved by Parliament.


In May this year, MPs rejected a the move by the Uganda Revenue Authority to rollout the digital stamp, but the tax body went ahead and implemented it, on grounds that it eases tax compliance.
The total cost for the digital tax stamps was projected at Shs129b.

The system, according to Uganda Revenue Authority is intended to track and trace products from their point of production including importation to the final distribution points.
Meanwhile, the battle for who is right or wrong between traders and the Uganda revenue Authority is still before Courts of laws.