Uganda Revenue Authority (URA) has adopted the use of Digital Tax stamps (DTS), with effect from 1st November 2019. The new stamps come as the Authority’s solution to combat illicit trade and concealed revenue figures.
Apparently, some of the challenges the tax body has observed include the prevalence of counterfeit products, local manufacturers facing unfair competition, tax evasion and smuggling during cross border transactions, and the failure to track goods.
The solution is expected to enable manufacturers, distributors, retailers and consumers to conveniently verify and trace all specified goods throughout the distribution chain.
All excisable goods and any other goods as gazetted by the commissioner are affected by this adoption.
What are Digital Tax Stamps?
Digital Tax Stamps are physical paper stamp which are applied to goods or their packaging but in this case contain unique features and attributes. These include: Security features and codes to prevent counterfeiting; Tamper-proof features; and Track and Trace capabilities.
These capabilities should enable consumers easily validate the stamp, traders and manufacturers to track the product movement; as well as government to monitor compliance of the product and stamp.
Also on these stamps are Quick response code (QR code) that will allow distributors, retailers and consumers to use an app on their smart phones to verify the authenticity of the products; and the provision of online ordering and approval for delivery of stamps.
Who benefits from the URA Digital Tax Stamps?
Almost every stakeholder stands to benefit from these digital tax stamps. From traders, manufacturers, importers, distributors and retailers, to consumers and government.
The traders will be able to monitor the movement of their manufactured/imported goods easily through their phone or laptop by simply installing the application.They can also request at an instant a report of their daily, weekly, monthly or annual transactions which will significantly improve record keeping.
The digital stamps will as well facilitate easy processing of VAT refunds and quicken returns filing, and quicken customs clearing for importers since the information would have been captured already.
Consumers will be able to verify the genuineness of the product and stamp by simply; looking out for the physical security features on the stamp. Alternatively, they can send in an SMS of the reference number on the stamp to URA and feedback shall be given with key details about the manufacture of the product.
Government will be in position to offer direct compliance action like tax education to appropriate taxpayer segments. Also, the entity shall be in position to fulfill her mandate of protecting Ugandans against harmful products and counterfeits.