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Digital tax company competent, say URA
Apply on: Digital Tax Stamps will apply to products such as cigarettes, water, beer and spirits, among others. FILE PHOTO
What you need to know:
The concern. The private sector last week said government should have sourced a local company to implement the Digital Tax Stamps system instead of hiring a foreign company.
Uganda Revenue Authority (URA) has said the Swiss-company – SICPA - which was contracted to implement the Digital Tax Stamps system, is competent enough despite concerns from private sector and controversies linked to the firm in other countries.
SICPA, which was single sourced, is currently implementing the Digital Tax Stamps system.
However, a section of the private sector claims there was no need for government to hire a foreign firm for such a “simple assignment”.
“The private sector feels that all the money spent on a Swiss company [SICPA] should have remained in the country because what they are doing is not a very sophisticated assignment. It can be done by a local firms,” Mr Gideon Badagawa, the Private Sector Foundation Uganda executive director, told Daily Monitor last week.
Mr Badagawa was reacting to a court order that had stopped URA from implementing the February 1 deadline that had required all manufactures producing water, soda, beer and spirits, among others, to have installed Digital Tax Stamps equipment.
Controversies
The company has also been sighted in controversies in a number of countries with investigations connected to bribery being conducted against it by the Federal prosecutor back in Switzerland.
In Kenya and Tanzania, the company is accused of ‘active bribery of foreign agents’ and ‘money laundering’.
Last year, Charles Nelson Finkel, the SICPA former executive vice president, was jailed for more than 11 years for paying bribes to a government official in Brazil.
Former Kenyan Prime Minister Raila Odinga, once accused SICPA of illegally obtaining a government contract, according to reports published by the Botswana Guardian, where it is linked to a company - Sovereign Border Solutions (SBS) – that was controversially contracted by the Botswana Unified Revenue Services to re-scope and amend the invitation to tender.
However, at the weekend, URA Commissioner Legal Patience Tumusiime Rubagumya, said that a study and due diligence was conducted to try and understand the type of company [SICPA] was, noting that “Indeed we were very comfortable that this company can actually deliver”.
She also said that much as SICPA has had issues in some of the countries were it is operating with some cases ending up in courts, the company has been able to prove itself in the implementation of Digital Tax Stamps in Uganda.
According to a status report published by URA recently, SICPA had by January 29 helped 21 manufactures and 11 importers to start implementation of Digital Tax Stamps ahead of the February 1 deadline.
Ms Rubagumya noted that before SICPA was contracted, investigations in countries where it had delivered similar products such as Tanzania, had been conducted and no issues had been found.
“We actually got information from where they were operating to see how they implemented this service and whether these countries derived value,” she said, adding URA also found that SICPA possessed other parameters such as sound financial standing to deliver implementation of the Digital Tax Stamp system.
In October 2018, URA procured the services of SICPA with the design and configuration of the digital stamp being approved by URA itself and Uganda National Bureau of Standards.
Meanwhile, URA and the Digital Tax Stamps challenger are expected to report to court today the outcome of a meeting that was held between the two parties in Nakawa, Kampala on Friday.
In the meeting, according to Mr Fred Muwema, the lawyer representing Mr Sylvester Kamuli, who sued URA seeking to halt the February 1 deadline for the implementation of Digital Tax Stamps, it was agreed that no person shall be arrested if they are found in possession of unstamped goods.
The system, it was agreed, is a phased process that should give Ugandans enough allowance to learn and allow manufacturers enough time mobilise resources to implement it.
However, other matter, Mr Muwema said, were differed for future negotiations.
Ms Rubagumya, the URA commissioner legal, at the weekend told Daily Monitor in a phone interview the discussions had not been conclude “but hopefully by Monday [today], we will have reached a resolution, which we will be presenting before the judge”.
She also noted that URA will make every effort to sensitise the public about provisions of the Digital Tax Stamps system in order for all Ugandans to understand it.
“We are simply informing the public that they should be aware of this … we don’t want to go on the streets and arrest somebody then they say they had no knowledge about it,” she said, noting that “for us to be able to implement the Digital Tax Stamps law is to make sure everybody gets to know the consequences”.
Ms Rubagumya also noted that much as focus had been put on manufacturers at the moment, consumer have an obligation, which was also discussed in the Friday meeting.
