Government grants manufacturers three months transition for digital stamp tax implementation

Prime Minister Rt. Hon. Dr. Ruhakana Rugunda has assured manufacturers that the go-live date of the Digital Tax Stamps enforcement would be February 1, 2020 instead of November this year. He also assured Manufacturers that the Government would meet the cost of installation and Digital Tax Stamps for the first year of operation.

In a meeting at the Office of the Prime Minister called to avert a possible shut-down of manufacturing today over Digital Tax Stamps, Rt. Hon. Rugunda told manufacturers that the government was “pro-people and pro-business”.

“I assure you that this government will do everything to encourage manufacturing and would not take any steps to frustrate you. We also, however, pursue all means to ease tax administration,” he said.

The Director of Tax Policy in the Ministry of Finance, Moses Kaggwa, confirmed the government commitment to cover the costs of Digital Tax Stamps for local manufacturers and said additional costs of implementation that were not envisaged would be deductible.

“We provided for the cost of installation of equipment and the cost of the stamps themselves. We did not, however, envisage some additional costs that a few manufacturers might face, but those costs will be deductible,” Kaggwa said.

URA Commissioner for Large Tax Payers, Silajji Kanyesigye, said the November 1, 2019 installation would only be for imported goods within the Digital Tax Stamp categories of: Tobacco, Sodas, Water, Wines, Spirits and Beer.

“We have given manufacturers a three-month transitional period so that between now and January 31, 2020 everyone instals and tests the equipment,” he said.

Manufacturers, led by Uganda Manufacturers Association (UMA) Chairman Barbara Mulwana, welcomed government commitment to pay the cost of Digital Tax Stamps and emphasized that at the end of the one-year period an assessment be carried out to determine value for money.

“As Manufacturers, we welcome government efforts to collect more tax revenue. But we are always concerned if these increase our cost of operation and threaten our survival. If URA and Manufacturers are not ready at this point to implement this or the government won’t get the benefit planned, it is better to wait before we implement it,” she said.

Rt. Hon. Rugunda urged the Manufacturers and government bodies to keep channels of communication open during the implementation process. Government, through the Minister of Trade, Industry & Cooperatives, has established a Technical Working Group to guide the smooth implementation of Digital Tax Stamps and review its success after the initial one-year period.

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