Since the introduction of its digital tax stamp, tracing, and reporting programme, Uganda has experienced continuous and sustained acceptance, implementation of and compliance with the programme.
When the system was proposed and adopted in 2019, it faced stiff opposition from manufacturers and the private sector, who were concerned that the system would increase the cost of doing business, while not providing enough revenue recovery to justify its adoption.
However, since its implementation, the system has shown the exact opposite. Participation has steadily and continuously increased. According to reports by the Uganda Revenue Authority (URA), participation has grown from just 200 registered taxpayers in 2020 to 1,100 registered manufacturers and importers at the end of the first half of 2023.
The last two years, in particular, have shown remarkable growth in on-boarding of new taxpayers. In 2022, URA reported a 21% increase in registered taxpayers as it on-boarded 364 manufacturers and importers. This was followed by an increase of 23.3% in the first half of 2023, representing the on-boarding of at least 209 additional manufacturers and importers.
To drive further adoption of the system, URA has increased the number of its inspections. The digital tax stamp is key, according to the authority. In addition, URA is offering and implementing an electronic fiscal receipting and invoicing solution, which is now used by over 1,060 companies.
The combination of digital tax stamps, increased enforcement, and additional systems and technology to aid with compliance and reporting has helped Uganda realise a 39% increase in overall tax revenue in excise duty and value-added tax collections.
Uganda has shown how a thoughtful combination of digital stamps, enforcement and technology can overcome concerns over system costs from manufacturers and the private sector.
The author of this article, Sven Bergmann, is the founder and CEO of Venture Global and advises brand owners, technology providers and governments on anti-counterfeit strategies, programmes and technologies. Send your comments to SBergmann@VentureGlobal.com.