Manufacturers and the private sector have asked government to stop being insensitive as it piles them with costs that not only threaten their businesses but are likely to harm the economy.
Reacting to a proposal that Uganda National Bureau of Standards (UNBS) had partnered with a Swiss company to introduce digital tracking solutions, Mr Gideon Badagawa, the PSFU executive director, warned that government is going to constrain production and force industrialist to take drastic measures that might harm the economy.
“There is already too much. You [government] are going to lead industrialists into actions that are likely to harm the economy,” he said, noting that government and its agencies must desist from thinking that every tax shortage will be solved by a selected group of the private sector.
Whereas the new move is good, he said, it must not burden businesses that are already struggling to shake of effects of Covid-19.
“It is wrong timing. How come they do all this without consulting the main stakeholders?” he wondered.
Speaking during a webinar organised by the standards agency in Kampala last week, under the theme certification and regulations 2020, Mr Paul Musimami, the UNBS deputy executive director, said they had partnered with SICPA, a Swiss company, to introduce digital tracking stamps, which will be key in fighting counterfeits and fake products.
“The digital stamps will help us [UNBS], manufacturers and consumers. You get goods and they are counterfeits [but] you can’t tell who manufactures them. So, it will be helpful to us, the economy and individuals. I would urge us to take it seriously,” he said.
It is not clear when UNBS plans to roll out the digital stamps, contracted under SICPA, the same company that implementing the digital tax stamps under Uganda Revenue Authority.
The digital tracking stamps, according to UNBS will cost Shs42 per product, which the private sector and manufacturers have indicated is another cost burden in addition to the digital tax stamps.
Mr Simon Kaheru, a board member of Uganda Manufacturers Association and the Coca-Cola public affairs and communications director, said the proposed levy defeats logic, noting that “even without Covid-19, business across the board had been constricted, so new measures that seek to suck more money out of the economy for no visible benefit to Ugandans don’t make sense”.
“UNBS should hold dialogue with ordinary Ugandans on why there should be a cost to them or why it should be so high. The same UNBS had the e-tag solution that worked perfectly fine at a small monthly fee. This move is going to be considered highly insensitive and, certainly, anti-business and anti-people,” he said.
The private sector and manufacturers in equal measure also wondered why government has chosen to deal with a foreign firm – SICPA – to do work that can be done by local firms and at a relatively less cost.
During the webinar, Mr Edwin Mugisha, from SICPA, said the digital stamps are tracking solution that will act as conformity marks to show that a product conforms to standards.
The stamps, he said, are paper markings bearing security features such as a QR code, which when scanned, will contain information about the product.
This, he said, seeks to control counterfeits because the stamps have been fitted with features that can relay information to consumers concerning conformity to standards.
Which goods does the digital tracking stamps apply to?
Mr Samuel Tumwesigye, the UNBS regional and international inspection principal, said all products with mandatory standards, among them food stuffs, beverages and construction materials, will be required to have a digital tracking stamp.
However, he said, products that currently bear the URA digital tax stamps will be exempted since their standards are checked through URA.
Imported products will also be expected to have a digital tracking stamps, which according to Mr Tumwesigye, will be affixed from the country of origin.
“As an importer, at the point when you are going to import in your consignment and you have requested for Pre-Export Verification of Conformity, that is the point you will need to request for a stamp,” he said, noting UNBS will roll out sensitisation about the stamps and how it will work before it is implemented.
UNBS during the meeting revealed that the stamps will carry a uniform cost of Shs42 per product, which manufacturers said is high and will affect cost of doing business.
However, Mr Musimami said the cost, which is expected to be forked by manufacturers, will most likely be passed onto consumers.
“In any case it will be us the consumers to pay because what will happen is the manufacturer will say no, let it be downloaded to the consumers, and for us consumers, it will be helping us to interrogate the product whether it is genuine or not,” he said.