Uganda Extends Tax Stamps to Cement and Sugar

On 1 April, the Uganda Revenue Authority (URA) will launch its ‘Digital Tax Stamps’ (DTS) programme on cement and sugar. Initially introduced at the end of 2019 on domestic and imported beer, spirits, wine, soda, mineral water and tobacco products, the programme resulted in a 270% increase in the number of active taxpayers in the country.

Under this new, expanded programme, which is provided by SICPA, every 50kg bag of cement will need to carry a tax stamp, and cement bulkers will also be required to pay a fixed amount per truck. As for the sugar stamps, these must be affixed to each bag of sugar sold on the market.

The new stamps will join the existing family of tax stamps and marks used on tobacco products and drinks. These consist of paper-based, standard-sized stamps for tobacco products (pictured above), long stamps placed as seals over the opening of bottles/kegs of wine, spirits and beer, round stamps for imported beer, soda and mineral water, and directly printed unique secure marks for local beer, soda and mineral water.

In a public notice posted on its website, the URA called for all cement and sugar manufacturers and packaging operators to register themselves for excise duty in accordance with the Excise Duty Act. Furthermore, it advised manufacturers and importers to ensure they had adequate space and tools to affix and activate the stamps at their registered premises.

All those involved in the manufacture and supply of cement and sugar will have until the end of June to deplete their stocks of unstamped goods. After that date, any taxpayer failing to affix a tax stamp onto their products will be liable for a tax penalty equivalent to double the tax due on those products, or UGX 50 million ($13,600) – whichever is higher.

Since the inception of DTS, the URA says the programme has successfully registered 315 businesses, comprising 247 manufacturers and 68 importers, against an initial target of 107 and 33 respectively.

Ian Rumanyika, URA Assistant Commissioner Public and Corporate Affairs, advised local media that, as of March 2021, URA had recovered over UGX 3.5 billion (close to $1 million) in revenue, as a result of apprehending 33 non-compliant operators who had been manufacturing, selling, exporting or distributing products without tax stamps.

Fuel adulteration plummets to sub 1%

In other news in Uganda, a study by the Atlantic Council Global Energy Centre shows that the country’s fuel marking programme resulted in the reduction of adulterated fuel from more than 29% in 2008, to just 0.5% today, reports the Daily Monitor.

The study, authored by Dr David Soud with support from Dr Ian Ralby and Rohini Ralby, indicates that whereas the global petroleum downstream sector continues to face criminality and smuggling, Uganda has, through its Fuel Marking and Quality Monitoring Programme, achieved substantial success against adulteration.

Fuel marking in Uganda is conducted by SICPA, with the Ministry of Energy and Mineral Development (MEMD) and the Uganda National Bureau of Standards overseeing its implementation.

The fuel is marked with a molecular marker at three different customs points, and fuel samples are taken from trucks and tested at mobile testing facilities. The testing process is monitored with live video feeds, and the chemical analysis takes roughly five minutes to indicate the presence, absence, or diluted state of the marker.

According to the MEMD’s Sector Performance Report, at least 139 fuel retail outlets were inspected in 2020, the majority of which were closed for participating in illegal operations, including those related to adulterated fuel.

However, this was a substantial reduction from the more than 300 dealers that were cautioned – and, in some cases, shut down – for dealing in adulterated fuel in 2017. Some of the closed facilities, the report noted, were habitual offenders, while others were mainly new entrants taking advantage of the system or retailing fuel without the requisite licences.