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Experts, Consumers Put URA on Defensive Over Effectiveness of Digital Tax Stamps

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Oyebode tasked URA to explain its reverse technology since local counterfeiters package fake products in branded boxes, tins and bottles.
James Odongo -URA

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Uganda Revenue Authority–URA came under the spotlight during the counterfeit conference held in Kampala on Tuesday over the effectiveness of its digital stamps and tracking solutions. 

The conference that was organised by the Anti-Counterfeit Network in Africa drew participants from among other countries Uganda, Tanzania and Switzerland. 

However, during the meeting, participants tasked URA to explain the applicability of digital tax stamps in fighting counterfeits.

Digital tax stamps as explained by Assistant Commissioner for domestic taxes department, James Odongo, who represented the URA Commissioner General, Doris Akol, means physical paper stamps, which are applied on goods or their packaging containing security features such as codes to prevent counterfeiting and allow for the tracing of the goods.  

He explained that digital tax stamps will enable consumers validate the stamp, traders and manufacturers track the product movement. It also enables government to monitor compliance of the product. 

He also says the stamp also contains the quick response code (QR code) that allows distributors, retailers and consumers to use an app on their smart phones to verify the authenticity of the products and online ordering among others.  

However, even with this explanation, counterfeit investigators, consumers and traders questioned whether the tax body sensitised the public on how digital stamp works. They also tasked Odongo to explain mechanisms put in place to track products even after they have been used.  

Solomon Oyebode Wilson, the Lead Investigator Clapper Ho Use Brand Protection and Investigation, said Uganda Manufacturers Association –UMA should have taken lead in providing initiatives to fight counterfeits.  

Oyebode argued that the exercise duty tax imposed on digital stamps will make manufacturers and service providers to transfer costs to consumers. Oyebode tasked URA to explain its reverse technology since local counterfeiters package fake products in branded boxes, tins and bottles.  

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URA introduced digital tracking solution and digital tax stamps in 2018 amidst criticism from traders and manufacturers.  The move also gave birth to a number of court cases in 2019. 

The tax body explained that digital tax stamps and digital tracking solutions would help fight illicit trade and counterfeit products thus protecting consumers against counterfeit products and safeguard local manufacturers from unfair competition.    

At least 30 companies including Rwenzori beverages have already embraced digital tax stamps. Isaac Kiyingi, the Executive Secretary Uganda Consumers Protection Association, called for inclusion of mechanisms that would ensure consumers are compensated for counterfeited products that find their way on the market.

Kiyingi said in most cases authorities impound counterfeited products but don’t talk about compensating consumers who had already bought them. 

This, Kiyingi reasons, can be resolved by bringing other stakeholders such as traders and consumers’ associations on board.

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Everest Kayondo, the Chairperson Kampala City Traders Association –KACITA, said government should ensure digital taxi stamps and digital tracking systems are free of charge in order to avoid counterfeits and smuggling.

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One of Anti-Counterfeit Network in Africa Directors, Fred Mwema urged URA to first conduct countrywide sensitisation about digital tax stamps and digital tracking systems/ solutions to avoid public criticism.