Blaming price hike on fuel marking, digital stamps is politicking - govt

Some of the prices of some consumer goods in a retail shop in Namuwongo, Kampala, on March 4, 2022.  PHOTO/FRANK BAGUMA

What you need to know:

  • Digital tax stamps were implemented in 2019 while fuel marking has been going since 2017, according to Rev Tukwasibwe, who also noted that the service was procured competitively through international bidding contrary to claims.

The government has dismissed claims that blame the current spike in prices of commodities on digital tax stamps and fuel marking.

Speaking in separate interviews yesterday, both Rev Frank Tukwasibwe, the Ministry of Energy Commissioner of Petroleum Supply and Mr Ibrahim Bbosa, the Uganda Revenue Authority corporate and public affairs assistant commissioner, questioned why anyone would be quick to blame the current situation on programmes that have been around for more than two years.

Digital tax stamps were implemented in 2019 while fuel marking has been going since 2017, according to Rev Tukwasibwe, who also noted that the service was procured competitively through international bidding contrary to claims.

“There is a problem somewhere. Politicians [are] trying to fight individual battles. Fuel marking costs way below Shs30 per litre. Those who are into cheap politics should stop it [because] the same politicians, passed the tax bills,” he said.

Fuel marking, Rev Tukwasibwe said, ensures that Ugandans do not consume substandard fuel, noting that its cost cannot be the cause for the current spike in fuel prices.

Fuel prices have been rising since October, increasing by about 36 per cent.

On Wednesday, Butambala Country MP and Shadow Finance Minister Muhammad Muwanga Kivumbi claimed that fuel marking, which introduces a unique marker into petroleum products before distribution, imposes additional cost on petroleum products thus escalating fuel prices. He also said that because digital tax stamps raise the cost of doing business, manufacturers had started passing the cost to consumers. 

However, Mr Bbosa said it was surprising that politicians had concluded that the spike was due to “digital tax stamps before appreciating other factors”.

“Digital tax stamps have been here for two years. So, did the inflation (sic) we are seeing today, start two years ago? They cost about Shs30 and the cost was absorbed by manufacturers,” he said, noting that some people are taking advantage of the current price hike to fight government programmes.

Mr Bbosa also noted that Uganda was not the first country to use digital tax stamps, saying they are used across East Africa to track smugglers, eliminate counterfeits and create transparency in manufacturing processes.

Honest discussion

According to Bbosa, digital tax stamps protect consumers, create transparency for revenue collection and tracks what is coming out.

Therefore, he says, instead of making unfounded claims, Ugandans must have an honest conversation with a view to finding solutions for the current situation. 

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