Covid-19 Crisis: URA Nets Four Manufacturers Flouting Digital Tax Stamps Protocols

Government of Uganda introduced Digital Tax Stamps, a measure intended to enhance tax compliance and to ensure that the Ugandan market has only authentic manufactured or imported products.

Introduced in November 2019, manufacturers and importers are required to affix digital tax stamps onto every product manufactured or imported before distribution into the market. Six items were gazetted to have digital stamps affixed onto them namely beer, wine, spirits, mineral water, soda and cigarettes.

While most manufacturers have since taken to stamping of all their products, a few were tempted to take advantage of the lockdown due to COVID-19 to flout digital tax stamps guidelines.

And the ‘sleepless’ Uganda Revenue Authority (URA)  nabbed four  last week in a crackdown.

According to Ian Rumanyika, Manager Public & Corporate Affairs at URA, the crackdown kicked off in Kawempe where the first culprit in Amron International, a manufacturer of Marley Pineapple Wine and Corona Pineapple wine who had never bothered to register for DTS was found.

“The company premises were closed off pending investigations on how much revenue this company has evaded by producing and distributing products without digital stamps,” Rumanyika said.

The 2nd company netted was Prime Care International, manufacturers of Choice Waragi, Star Pineapple Wine, White Cane Spirit and Commando Premium Waragi.

URA has intensified hunt for companies flouting DTS practices

“This company was found bypassing the Digital Tracking Solution by not activating the ordered stamps. Unstamped products were found in their stockroom and their premises were consequently sealed off pending further investigation,” Rumanyika said.

He added that Cloud Water World, manufacturers of Cloud Water were the third culprits brought to book. They had registered for DTS but unfortunately continued to produce without ordering for stamps. Their premises were also sealed off pending payment of the relevant taxes and penalties.

The fourth culprit was John Distillers located along Biira-Masanafu road. They are the manufacturers of X5 Gin and Camp Fire Gin.

“Though all the products found at their premises were affixed with stamps, their management team could not account for the variance in stamps, an indicator of under declaration and or falsified production volumes and sales. Their premises were also sealed off,” he said.

He added: “Once a manufacturer is found with unstamped goods at his place of production, the penalty is Ugx 50,000,000/- or two times the tax value of the unstamped goods produced whichever is higher.”

URA says a well-stocked enforcement team continues the hunt for other manufacturers who might be flouting DTS protocols through robust in-field reconnaissance and DTS system data analysis.

“The focus is soon turning to wholesalers and distributors who purchase and distribute unstamped goods. Stocking of unstamped goods is a no go area,” Rumanyika said.


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