John Musinguzi Rujoki, the Commissioner General of the Uganda Revenue Authority (URA), has announced a commitment to reviewing the costs associated with the Digital Tracking Solutions (DTS) following feedback from manufacturers about its financial burden. The announcement came during a launch event for a report by PricewaterhouseCoopers on the role of DTS in enhancing Uganda’s tax system. The Commissioner General emphasized that the cost of implementing DTS is intended to be manageable and that the benefits, including improved tax compliance and a reduction in illicit trade, outweigh the financial outlay. This statement comes in response to concerns raised by Simon Kaheru of Coca-Cola Beverages, who has described the DTS costs as prohibitive and challenging for manufacturers.
Introduced in 2019, DTS has played a significant role in expanding Uganda’s tax base, evidenced by an increase in registered manufacturers and importers. The system is designed to curb tax evasion and boost supply chain transparency. Despite its success in certain sectors, there is ongoing resistance to full compliance, which limits the system’s overall effectiveness. “The improvement in sectors where compliance is high demonstrates the system’s potential,” stated Rujoki. URA data indicates that DTS not only acts as a regulatory measure but also stimulates economic activity by creating a fair competitive environment.
Zackey KKalega, the acting Commissioner of Internal Trade at the Ministry of Trade, addressed the government’s strategies against illicit trade, including forming a committee and collaborating with major companies like BAT and UBL. The URA has organized numerous workshops and training sessions to educate businesses about the importance of DTS and how to integrate it effectively into their operations. Nonetheless, challenges such as non-compliance and misuse of the system persist. Agnes Ssali, Legal Director and Company Secretary for Uganda Breweries Limited, highlighted the severe impact of illicit trade in the alcohol sector, exacerbated by DTS misuse like underdeclaration. She advocates for increased digitization as a solution.
As the URA continues to refine its tax system, enhancing compliance with DTS remains a priority, with a focus on sectors including kombucha products to ensure that all stakeholders can fully benefit from the system’s capabilities and support Uganda’s economic objectives.
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