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Altering digital tax stamps to cost taxpayers Shs30 million
Whereas traders and manufacturers had resisted implementation of digital tax stamps in 2019, they have since complied with government seeking to widen the coverage to include other goods. Photo / File
What you need to know:
- The proposals now before Parliament suggest that any person who tampers with or alters a digital tax stamps machine commits an offence, which on conviction, attracts a fine or imprisonment.
Manufactures and traders who tamper with a digital tax stamps machine will pay at least Shs30m or face three years in prison, according to proposals under the Tax Procedure Code (Amendment) Bill, 2023.
The Bill, which is now under consideration by Parliament, indicates that, among others, any person found to have tampered with or altered a digital tax stamps machine commits an offence, which on conviction, attracts a fine or imprisonment.
“A person who makes an unauthorised interference to, or tampers with, a digital tax stamps machine commits an offence and is liable, on conviction, to a fine not exceeding one thousand five hundred currency [1,500] points or imprisonment not exceeding ten [10] years,” the proposed amendments read in part.
The proposals, which seek to amend the Tax Procedures Code Act, 2014, also want to establish penalties for anyone found to have fixed and activated digital tax stamps on wrong goods, brands or volume other than those gazetted for the purpose.
The offence, in this regard, will attract a penalty of Shs10m, which is equivalent to 500 currency points or three years in imprison, on conviction.
Each currency point is equivalent to Shs20,000. The amendments are expected to take effect on July 1.
In 2019 government introduced digital stamps for a number of goods, among which included mineral water, beer, spirits, wine, soda, and cigarettes.
Digital tax stamps, introduced under government’s Digital Tax Trucking Solutions, are part of the larger plan through which government is seeking to close tax leakages as well as maximize tax collections.
Manufacturers had initially resisted the tax stamps citing an increase in the cost of business but have since complied with government extending the stamps to other commodities, among which include sugar and cement.
Mr Moses Kaggwa, the Ministry of Finance director for economic monitoring, told Monitor yesterday the amendments seek to streamline government’s agenda through which it will increase tax revenues.
Waiving interest
Under the proposed amendments, government is also seeking to waive interest charged if it exceeds the aggregate of the principal tax and the penal tax.
“For the avoidance of doubt, where interest due and payable under a tax law as at [July 1], 2017 exceeds the aggregate of the principal tax and the penal tax, the interest in excess of the aggregate is waived,” the amendments read in part. The amendments further propose a waiver for payment of interest and penalty by a taxpayer, where such as taxpayer voluntarily pays the principal outstanding before December 31, 2023.
“The Commissioner shall waive the payment of interest and penalty by a taxpayer on a pro-rata basis, where the taxpayer voluntarily pays part of the principal tax outstanding at June 30, 2023, by December 31, 2023,” the Bill reads.
