Manufacturers, importers and distributors of sugar and cement have up to May 31, 2021, to clear stocks of the products that have no digital tax stamps. The stamp was introduced to enforce the Digital Tracking Solution (DTS) aimed at ensuring that the said products only go onto the market after being cleared for standards, taxes and origin.
For a year now, URA has been enforcing digital tax stamps on foods and beverages as well as tobacco products. Now, the solution is being extended to sugar and cement starting April 1, 2021. After the introduction, the manufacturers and traders will have a two-month grace period to clear their stocks.
“In addition to Beer, Soda, Spirits, Wines, Mineral water and Tobacco products, the Minister of Finance, Planning and Economic Development has gazetted cement and sugar be affixed with Digital Tax Stamps,” says a statement from URA. Concerned businesses have now been advised to create space for the installation of the digital tax stamps equipment, to be ready to implement it in time.
All premises for manufacture or packaging of the above-gazetted goods must be registered for Excise Duty under the Excise Duty Act. When the solution was first introduced, it faced some resistance with businesspeople unsuccessfully arguing that the government should bear the cost of installation, to avoid increasing the cost of doing business.
“Manufacturers and importers of the above goods are required to have adequate space and tools to facilitate affixing and activating the digital tax stamps on these products at their registered premises,” the statement says. The two products were gazetted in January but the implementation delayed to give the two parties time, and help the businesses avoid possible penalties.
“A taxpayer who fails to affix a tax stamp on goods is liable to pay a penal tax equivalent to double the tax due on goods or fifty million shillings, whichever is higher,” the statement adds. Each 50kg bag of cement will have a stamp bought at 135 Shillings, while cement bulkers will pay 60,000 Shillings per truck. The coat of the stamp on sugar will be 39 Shillings per bag.
The Government of Uganda moved to implement Digital Tax Stamps with a focus on Local Excise Duty.
For about a year of enforcement on the DTS on tobacco and beverages, a total of 3.5 Shillings has been recovered from violators of the system