Manufacturers raise red flag over digital tax stamps

Kampala, Uganda | THE INDEPENDENT | Ugandan manufacturers want Uganda Revenue Authority (URA) to explain what the DTS would achieve if a manufacturing sub-sector has no counterfeits.

They want URA to show if the DTS will increase revenue collection and compliance considering that the formal manufacturers are already compliant, and show proof that there is under-declaration and undervaluation.

The manufacturers are also challenging why they should not only bear the cost of DTS installation but also pay for the stamps in advance.

They also want to know why a government that promotes a protectionist policy of Buy Uganda; Build Uganda is sourcing for a foreign company and yet the country has a functional security printing firm – the Uganda Security Printing Company.

Another issue raised by the manufacturers is why URA cannot harness information technology to link its systems with those of the manufacturers in order to get real-time information on production and distribution.

They also argue that in case of system failure due to, for example, cut in internet, what will it mean for production, adding that who will meet the cost of systems and software upgrades.

The manufactures also wonder why URA cannot use barcodes to track and trace goods, a formal system that was already in the works by the standards bureau.

On the cost of the stamps, the manufacturers want URA to explain what would happen if the cost is passed on to the consumer and in turn if affects demands for the products.

They also want to know how much of the money that will be paid for the stamps will go to government and how much of it will be externalized by the Swiss company.

The manufacturers also demand that instead of rolling out the DTS en masse there could be a free pilot trial phase to ascertain its feasibility.

These and many other issues are on table at the discussion between the manufacturers and URA ongoing at Uganda Manufacturers Association in Kampala.

Asked to comment on claims that some manufacturers are resisting the DTS because it would expose their under declaration of outputs, the chair of Uganda Alcohol Industry Association, Kenneth Barungi, says that is not true because their production and distribution processes are audited.

Barungi says the figures they present to the tax authorities are the same figures they give to their shareholders. He says the best would be to formalize the informal players instead of piling up an unnecessary layer on manufacturers.

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