National Cement Company hails Digital Tax Stamps for combating counterfeits

Kampala, Uganda | THE INDEPENDENT | The National Cement Company has praised Digital Tax Stamps (DTS) for their effectiveness in tackling the issue of counterfeit cement in the market. Introduced in 2019, DTS is a measure designed to digitize tax administration, aiming to prevent revenue leakages, particularly in the manufacturing sector.

During a media engagement, Heet Raval, the Sales and Marketing Manager for Simba Cement, highlighted the benefits of DTS in curbing counterfeits. He explained, “In the first place, DTS has helped ensure that products are manufactured within Uganda, making it difficult for poor-quality products to access the market. There had been a lot of smuggling before, and now the DTS stamp is controlling it.” Raval also noted that DTS contributes to regulating product prices by ensuring equitable tax payments across the industry, thus promoting fair competition.

According to data from the Uganda Revenue Authority (URA), DTS has significantly increased the number of gazetted local excise duty importers and manufacturers. As of May 2024, the number of local excise duty importers grew from 55 to 212, and manufacturers from 119 to 689, representing growth rates of over 200 percent and 600 percent, respectively. The intervention has also led to a reduction in volumes of cement, sugar, and wines.

A 2024 PWC-PSFU report revealed that the introduction of DTS has led to a 30 percent increase in revenues, reaching 963.4 billion Shillings, up from 740.8 billion Shillings. Simba Cement has reported the lowest market price for its products, attributing this to the recent commissioning of a new clinker plant in western Kenya. The plant has reduced production costs by providing proximity to essential raw materials.

Edna Agwata, the Sales Manager, explained, “We have initiated a price reduction in the market, forcing our competitors to also lower their prices. This has been brought about by the commissioning of the clinker plant. The proximity to this raw material has greatly influenced our price strategy.” Previously, Simba Cement imported clinker from coastal Kenya and overseas, which affected final product prices.

Although clinker is available in Uganda, Agwata mentioned future plans to exploit local sources. “Clinker is available in Uganda, and there are initiatives to exploit it in the future, but at the moment, we are utilizing what is immediate and readily available.” The company chose a plant in Kenya due to the high demand for clinker in Uganda, which exceeds local production capacity.

“The clinker in Uganda cannot satisfy our needs as manufacturers. Most of us supplement by importing. Our advantage is that we don’t import from very far now, but just near the Ugandan border,” Agwata added. Uganda’s annual clinker demand is about 9 million tonnes, but domestic production only meets 1 million tonnes.

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