Local Kombucha beverage producers claim that their company’s profit figures are no longer colorful. The manufacturers have been in a tizzy ever since the Uganda Revenue Authority included the beverage to the list of goods that require a digital tracking solution (DTS) for tracing. (URA’s DTS is aggressively enforcing compliance)
The president of the Uganda Kombucha Manufacturers Association, Sam Turyatunga, claims that DTS was a costly endeavor that raised their manufacturing costs and reduced their revenues. Customers that purchase Kombucha products will pay an additional fee to cover the manufacturers’ costs.
“Digital stamps come with a lot of taxes since you have to use one on your goods in order for someone to count and figure out how many bottles you produced over the course of a year or a month. For instance, Kombucha has an excise fee of Shs 230 per litre and a stamp of Shs 35 each bottle, but you also have to add VAT, which raises the cost of manufacture, according to Turyatunga.
Turyatunga also said that since each bottle is now paid, customers can no longer take advantage of freebies.
“You would give a customer three extra cartons when they purchased 100 cartons. Turyatunga described how DTS has cost them, saying “because each bottle is counted by URA, it means we have to discontinue all that.
Digitization technologies streamline and speed up countless corporate operations. To boost production and the caliber of their products for clients, the majority of businesses must fully implement. This is just one of many factors that led to the government putting the Digital Tracking Solution into effect in November 2019. The approach aims to ensure that the general public consumes genuine goods from a protected market, in addition to increasing revenue, particularly for VAT and Local Excise Duty.
There is no need for manufacturers to raise product pricing, according to Robert Amanya, the acting manager of DTS at URA, because any additional costs passed on to the final consumer are always claimed as a credit in their VAT input tax and as expenses in their income tax.
The taxpayers who might be protesting right now are individuals who have never before paid any excise tax, VAT, or income tax. The additional expense results from the fact that they now have to use their extraordinary profits, according to Amanya.
Amanya stated that there has been an increase in the number of taxpayers complying, even if there is still a need for ongoing tax education on DTS. They had 107 taxpayers at the time of the program’s launch, but 545 manufacturers and 140 importers have already been included. This corresponds to a total income collection from DTS of Shs 687 billion.
URA anticipates increasing its collection through ongoing nationwide enforcement actions against manufacturers who are still in possession of unstamped gazetted goods. Through the process, URA has added new taxpayers to the register and raised more over Shs 13.39 billion.
Due to programs like DTS, URA currently has 2,321,828 taxpayers on its tax register. A product can be tracked and traced using DTS, according to URA, from its production or importation through distribution and consumption. It outlines the use of Digital Tax Stamps by producers and importers who use both manual and automated production processes, as well as the verification of goods from the factory or point of import to the point of sale.
The physical stamps are placed to products or packaging that contains security elements like codes in order to combat counterfeiting and enable product tracing.
The program aims to safeguard consumers from dangerous items, fight illegal commerce and the sale of inferior or counterfeit goods, promote fair competition in the market, and boost tax revenue for national plans.
According to URA, there are currently 13 products for DTS that have been gazetted, and the deployment has been done in stages. Beer, soda, bottled water, wines, spirits, tobacco goods, sugar, and cement are among the first eight products. URA began selling additional products on May 1, 2022, including cooking oil, fruit and vegetable juices, non-alcoholic drinks (such as kombucha, tea, and health drinks like bushera), alcoholic drinks, and fermented drinks (cider, mead, perry or other form of beers).
In order to prevent penalties that could harm their business, URA encourages taxpayers to register for the DTS by purchasing tax stamps, applying them on their items, and activating them. (URA’s DTS is aggressively enforcing compliance- CELEBRITY JAZZ UG )