EABC urges EAC states to reduce cost of digital tax stamps

Kampala, Uganda | THE INDEPENDENT | The East African Business Council (EABC) has called for a review and reduction in the cost of the Digital Tax Stamp system, which has been implemented in the region to improve revenue collection on excisable goods.

The regional body is urging the East African Community states, through the revenue authorities, to take quick action to reduce Digital DTS costs by reviewing existing DTS contracts with a view to reducing the high excise stamp fees imposed on manufacturers.

This follows a recent EABC analysis that showed that despite the solution provider of DTS being the same across the region, the cost of the stamp differs significantly in each country.

The stamp fee is an additional to the excise duty tax payable under the country’s respective Excise Act – which EAC claims is equivalent to double taxation for manufacturers.

The analysis also reveals that the cost of excise stamps is disproportionately apportioned to different products with no justification and that the cost of the stamps paid by the manufacturers goes to the ‘foreign’ DTS provider/supplier and not to the government’s revenue authority.

EAC executives says a reduction in costs would enhance compliance of small-scale manufacturers with DTS regulations, improve sustainability, and further boost revenue collection.

“Wider public stakeholders’ engagement and inclusion of manufacturers’ input in the re-negotiation process of a better digital tax stamp system is important,” said John Bosco Kalisa, EABC CEO.