Uganda Revenue Authority (URA) has this morning nabbed four companies around Kampala for flouting the Digital Tax Stamps Protocols.
The crackdown kicked off at Kawempe at the Northern Outskirts of Kampala City, where the first culprit was Amron International, a manufacturer of Marley Pineapple Wine and Corona Pineapple Wine.
It was found out that the company had never bothered to register for Digital Tax Stamps.
Their premises were closed off pending investigations on how much revenue they have evaded by producing and distributing products without digital stamps.
The 2nd culprit was Prime Care International, manufacturers of Choice Waragi, Star Pineapple Wine, White Cane Spirit and Commando Premium Waragi.
URA found out that they were 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.
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.
The government introduced Digital Tax Stamps, a measure purposed 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 the 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. Four were nabbed last week in a crackdown.
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.
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 whole sellers and distributors who purchase and distribute unstamped goods. Stocking of unstamped goods is a no go area.