By Annet Nantongo
The taxman is set to recover over UGX 660 million from penalties and taxes due from taxpayers who play cat and mouse with URA on the Electronic Fiscal Receipting and Invoicing solution (EFRIS). Since February 2024 to date, URA has so far penalised 110 taxpayers that were discovered flouting the EFRIS system.
This recovery will also spread to taxpayers who flout the digital tax stamps system. For example, yesterday, the URA enforcement team in Arua confiscated over 8,000 cartons of vodka/whiskies that were recovered without digital tax stamps in a secret store house in Arua city. The team expects to fetch over UGX 50 million in penalties from this operation.
The Uganda Alcohol Industry Association has on several occasions called on government to stamp out illicit alcohol producers on the market because they not only make tax free money, but also pose a health risk since their products are not subjected to thorough standards certification.
Since 2020, Government through Uganda Revenue Authority (URA) and Uganda National Bureau of Standards (UNBS) introduced the digital tracking solution (DTS) to curb illicit trade of the gazette products and level the market field for compliant taxpayers. The stamps also provide a track and trace capability of goods along the value chain, to ensure the standards are not violated, for the good health of the consumers.
The seizure in Arua is part of the countrywide revenue mobilisation project that URA is currently running with focused enforcement operations on VAT taxpayers that defy enrolment to the EFRIS systems and non-usage of Digital Tax Stamps and rental tax defaulters. The operation which rolled out in January this year has over 201 officers stationed at key checkpoints to carry out spot-checks on goods for stamps, fiscalised receipts and invoices, and also comb homes and properties for rental tax arrears.
“VAT taxpayers that defy EFRIS have to pay UGX 6 million, which can be charged once a month from businesses and individuals. For DTS, if the products are not stamped, the manufacturer is penalized and the products are seized until they are properly stamped,” said Sandra Kaitare, the Assistant Commissioner of the Petroleum and Mining Division.
Meanwhile, vodkas and whiskies are one of the 13 items gazette to apply tax stamps which rolled out in 2019, to ease declaration and payment of excise duty to URA by the importers and manufacturers of the said products.
The other 12 products gazette to affix digital tax stamps include beer, soda, bottled water, wines, tobacco products, sugar, cement, cooking oil, fruit and vegetable juices, non-alcoholic beverages (kombuchas, teas and health drinks, bushera), alcoholic beverages and fermented beverages (cider, mead, perry or other form of beers).
A taxpayer who fails to affix or activate a tax stamp is liable to a penal tax equivalent to double the tax due on the goods or UGX 50 million as stipulated under Section 19B (1) of the TPCA 2014.
“Whereas we are penalizing, the ultimate goal of this enforcement is to ensure normal flow of business.The success of this project is finding fewer people to penalize,” said Kaitare.
