Beverage, cigarette dealers in Uganda have 5 days to acquire digital stamps

digital tax stamps
All beverages are required to have digital stamps or risk being evicted from the market.

Kampala, Uganda | URN | Manufacturers and importers of beverages and cigarettes have five days to have their products stamped with the Digital Tax Stamp (DTS), or their goods will not be on the market.

The DTS is a machine-readable stamp put on a package of a product to reveal details of the real manufacturer of the product when scanned.

The Uganda National Bureau of Standards (UNBS) and the Uganda Revenue Authorities (URA) are charged with enforcing the initiative that is aimed at catching smugglers, counterfeiters and tax evaders.

The authorities are able to find out whether or not the product went through all the quality assurance procedures during production and if the due taxes have been paid.

The system has been undergoing a phase one process of implementation where few products like cigarettes were targeted. Ahead of the rollout to more products, producers and importers are welcoming the move by the government because it will protect the genuine ones against counterfeiters and smugglers.

However, they say the timing of the enforcement is bad at the time when the manufacturers are facing difficulties raising up their businesses after the effects of the covid-19 pandemic.

URA’s Public Relations Manager Ian Rumanyika urges the concerned business people to comply before October 1, because their products will not be allowed on the market.

However, the business community says the government still has many more important things to do, including helping formalize SMEs which dominate the private sector before introducing costly measures like DTS.

Kampala City Traders Association Spokesman Issa Sekitto says that because of the pandemic, some traders still have stocks purchased before the directive on digital stamps.

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The importers have also warned that the targeted products are going to see prices increase if the government insists on leaving the burden of the cost onto the producers and importers, who will then have to transfer the costs onto the consumer. They say the cost is too high.

However, URA’s Head of Corporate and Public Affairs Vincent Seruma says the cost is minimal, adding that the piloted products have not undergone price increases attributable to the stamp costs.

On why the government did not strengthen the UNBS quality mark instead of introducing a new cost, Seruma says the DTS serves more than one purpose, including traceability of the product, quality and fight against illicit trade, as well as ensuring revenue protection.