Finance Ministry applauds impact of DTS as URA, BAT strike deal against illicit trade

Kampala, Uganda | THE INDEPENDENT | The Government of Uganda has reaffirmed its commitment to the Digital Tax Stamps (DTS) program, emphasizing its role in strengthening tax compliance and market integrity.

Isaac Arinaitwe, the Ministry of Finance’s Principal Economist, explained that the DTS program, launched in 2019, has been critical for enhancing tax transparency and supporting legitimate businesses.

“The DTS has supported timely and improved accuracy in the declaration and assessment of VAT and excise duty. Deliberate enforcement activities and stamp monitoring have created a compliance culture with the new system rules among taxpayers,” he said

According toi Arinaitwe, Digital tax stamps help tackle counterfeit and unlicensed goods, which in turn protect public health, improve product standards, and curb illegal trade.

Arinaitwe’s comments follow a meeting between URA and British American Tobacco (BAT) officials which resolved to identify ways on curbing illicit trade in cigarettes in the East African region.

During the meeting held at URA headquarters, Nakawa BAT proposed different ways through which to curb the vice that include public destruction of all seized cigarettes, enforcement of the labelling requirements, implementation of Digital Tax Stamps (DTS) and enhancement of manufacturing and supply chain controls to curtail tax leakages.

Achola highlighted that the illicit trade in cigarettes has grown to 34.1% in Quarter 2 2023 from 15.8% in Q4 2019, saying, “In Uganda, we now have 34% incidence of illicit trade, which means one out of every three cigarettes smoked in Uganda is duty not paid, or is sold here illegally.”

He noted that this increase is alarming and calls for total attention from URA.

The Commissioner General John R. Musinguzi on ther other hand, commended the BAT team for the proposals in curbing illicit trade in cigarettes and pledged commitment to restrain the vice.

“We are concerned about revenue leakage and it came to our notice that the increase in smuggling of cigarettes is affecting you and our revenues,” he said.

Godson Mwesigye, the Assistant Commissioner Enforcement noted that URA will request manufactures of cigarettes in Uganda to batch the cigarette Bombas and provide URA with the batch numbers so as to curtail the illicit trade and further noted that URA will implement the track and trace solution in DTS