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Digital tax stamps will curb illicit trade - Batu
According to URA goods such as cigarettes, water and soda, among others must have Digital Tax Stamps. FILE PHOTO
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- Mr Philemon Kipkemoi, the Batu non-executive director, during the same meeting, indicated the Batu counter had had less activity in the period as many shareholders had held onto their shares, which as a result , has seen the company’s stock stagnated at Shs30,000 at the Uganda Securities Exchange.
British American Tobacco Uganda (Batu) has said it supports government’s measure to curb illicit cigarettes trade through Digital Tracking System Solution.
The solution, which among them include Digital Tax Stamps that were implemented in September last year, Mr Mathu Kiunjuri, the Batu managing director, said will partly curb the sale of illicit cigarettes as well as help to curb loss of revenue by both cigarettes manufacturers and government.
Speaking during a post annual general meeting in Kampala yesterday, Mr Kiunjuri said illicit trade eats into government revenue by up to Shs30b annually, noting that at least one in every five cigarettes on the Ugandan market, is sold illegally.
The loss, he said, is orchestrated through smuggling and evasion of taxes, which as he said, needs stringent measures to save government revenue as well as protect cigarettes manufacturers from unfair competition.
“We support the implementation of the Digital Tracking System Solution by Uganda Revenue Authority (URA) and believe it presents an opportunity to further address this [illicit trade] challenge,” Mr Kiunjuri said.
Government, through URA, in September, implemented the Digital Tax Stamps, one of the measures under the Digital Tracking System Solution, which seeks to, among others, eliminate sell of substandard goods and tax evasion.
However, the tax, which for now, applies to soda, spirits, wine, water and cigarettes, among others, has faced resistance with some manufacturers saying it increases the cost of doing business.
The controversy stems from the requirement for manufacturers to meet the cost of installing equipment for the stamps, which they say is an unnecessary expense, especially at a time when many of them are facing cash flow and operational challenges.
However, Daily Monitor could not immediately ascertain Batu’s position in regard to the cost of digital tax stamps.
The company also indicated it had already paid out a total dividend of Shs15.7b to at least 1,232 shareholders for the year ended December 2019, in conformity with its dividend policy.
Mr Philemon Kipkemoi, the Batu non-executive director, during the same meeting, indicated the Batu counter had had less activity in the period as many shareholders had held onto their shares, which as a result , has seen the company’s stock stagnated at Shs30,000 at the Uganda Securities Exchange.
Batu also indicated it had paid at least Shs96b in Excise Duty, Value Added Tax and Corporation Tax in the period up from Shs90b paid in 2018.
