Uganda Tax Stamp Programme Smashes Performance Targets

Following the 2019 launch of its tax stamp and traceability programme on locally manufactured and imported beer, spirits, wine, soda, mineral water and tobacco products, the Uganda Revenue Authority (URA) has far exceeded some of the key performance targets set for the programme.

Specifically, the number of taxpayers registered into the programme has surpassed the target number by 257%, with registrations by manufacturers/importers totalling 406, against a target of 140.

What’s more, since 1 April this year (ie. just two months ago), when the programme was extended to cement and sugar, 10 out of the targeted 18 local manufacturing sites for these products have already been registered in the system.

In terms of revenue performance, the current financial year (to April 2021) has registered 11.6% year-on-year growth in local excise duty collections, from 211 manufacturers using the programme, in a year when the economy was heavily affected by COVID-19.

There have been a number of challenges though, reports the URA, one of which has involved the use of alcoholic substitute products, such as kombucha (a fermented beverage made from sugar, malt or malt substitutes, tea, coffee and other ingredients, with a symbiotic culture of yeast and bacteria), which are beyond the scope of excise duty and the use of tax stamps. Some local producers have been hiding behind these products in order to compete unfairly, given that they have not been paying excise duty or tax stamp fees.

However, new policy changes have been introduced to address this challenge, resulting in extensions of the tax stamp and traceability programme, not only to kombucha, but also to cooking oil, cider, juice and energy drinks.

Another challenge pertains to counterfeit tax stamps on non-compliant products, particularly spirits, which is a major source of revenue leakage. URA has responded by increasing its surveillance activities, with the result that a number of non-compliant parties have been apprehended and fined.

The URA has also launched a smartphone application, called Kakasa, to enable all citizens to verify the tax stamps. The launch has been accompanied by a very intensive PR campaign, with advertisements and a very active presence on social networks, eg. https://twitter.com/urauganda.