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UNCERTAINTY AS JUDICIARY BLOCKS DIGITAL STAMPS COMMENCEMENT

By Mulengera Reporters

URA’s much publicized rollout of the digital stamp has suffered big frustration through judiciary intervention whereby the Commercial Division of the High Court has issued an injunction blocking the entire exercise.

Roll out was commencing in April targeting high risk products like cigarettes, beers, wines, spirits, sodas, and mineral water. In April URA Head Digital Tracking solutions Clare Musiime Bakanga told media reporters that the plan was to start with tobacco before tackling other items.

It now emerges all this never happened because of the Court intervention blocking digital tax stamps which are basically physical paper stamps applicable to goods and their packaging. The stamps have security features and codes making them tamper-proof for prevention of successful counterfeiting.

The stamps have the track and trace capabilities to enable consumers validate them. Manufacturers and traders are supposed to be enabled to track the product movement and government to monitor compliance with minimum standards and requirements.

All this is enabled through the use of a quick response code (QR code) allowing distributors and consumers to use an app on their smartphones for verification of the authenticity of the products.

To Ag PSST Patrick Ochailap the digital stamps are one of the initiatives government intends to use to boost revenue collection in the FY2019/20. URA is targeting Shs20trn in revenue collections for the FY2019/2020. This is an improvement from the preceding FY2018/19’s Shs16trn. A whooping Shs48bn is expected to be realized from the digital stamp’s pioneer implementation year.

The court injunctory interference now means URA will have to endure prolonged litigation with manufacturers who aren’t comfort with digital stamp seeing it as an attempt by government to exploit them more. They claim the new intervention will require them to incur additional costs while doing business and want it halted by court.  For government that will mean postponing the realization of close to Shs50bn in additional revenue. Government insists the digital stamp initiative is good for all as it helps businesses not to suffer from unfair competition that comes with contraband goods.

In implementing digital stamps, URA has to work with Uganda National Bureau of Standards (UNBS) to ensure they maximize revenue collection while combating illicit trade and money laundering. The resistance to block digital stamps began in 2015 when the idea was first mooted. Uganda Alcohol Industry Association which unites sellers and manufacturers of alcohol protested strongest calling on URA to abandon the proposal from its infancy. The alcohol industry players wanted government to consider other options to address money laundering and other bad trading practices. They insisted whereas tackling illegal trade was okay, the cost to those doing legitimate business was way too high if the digital stamps initiative was implemented. URA has refused to be demoralized even when faced with the latest injunction and the top management is resolved to continue dialoguing with MPs and other stakeholders to generate common understanding on the essentiality of the digital stamps. MPs have previously blocked passage of an additional Shs50bn for URA for the initial implementation of the digital stamp project. There is a possibility of soliciting this money from donors now that Parliament has become reluctant. (For comments, call, text or whatsapp us on 0703164755 or email us at mulengera2040@gmail.com).

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