In recent weeks, the Uganda Revenue Authority (URA) has intercepted six trucks carrying a total of 1,900 bags of Simba cement. These trucks were apprehended in the areas of Lwakhakha and Suam river.
Out of the seized bags, 1,500 lacked the necessary digital tax stamps and had not fulfilled the customs requirements for cement importation, making them contraband. The remaining 400 bags did have digital tax stamps but had entered the country through unofficial border points.
The trucks with license plates UBK148Z, UBK239P, UBB717U, UBN469B, UBN430K, and UBH412T were all transporting 250 bags of unstamped cement each. Additionally, two trucks, UBN308N and UBH736B, were carrying 250 and 150 bags, respectively, of cement with tax stamps.
Mr. Ibrahim Bbossa, the URA Spokesperson, explained, “The cement bags with stamps lacked customs import documentation indicating tax payment. It was also discovered that these trucks obtained a single import document for one truck but used it to smuggle in multiple trucks without meeting their customs tax obligations.”
Under Section 19B (1) of the TPCA 2014, individuals failing to affix or activate a tax stamp may face penalties, including a tax double the due amount or UGX 50 million, whichever is higher. Other consequences may include goods seizure, business closure, distress proceedings, or legal prosecution.
Cement imported to Uganda from the East African region is subject to a 0% import levy. However, importers must declare the goods and pay a 18% VAT, 6% Withholding tax, and a 1.5% infrastructure levy. None of the confiscated cement bags had met these requirements.
Cement is among the 26 products and services liable for excise duty. Excise duty is a tax on specific goods and services, aimed at generating revenue and regulating their consumption by increasing their cost. It also applies to certain imported items that can be produced domestically.
Cement, for instance, carries an excise duty of UGX 500 per 50kgs when digital tax stamps are applied. The introduction of digital tax stamps in 2019 has streamlined the declaration and payment of excise duty for importers and manufacturers of the 13 items covered by the tax stamp initiative.
The other 12 products requiring digital tax stamps include Beer, Soda, bottled water, wines, spirits, tobacco products, sugar, cooking oil, fruit and vegetable juices, non-alcoholic beverages (such as kombuchas, teas, and health drinks), alcoholic beverages, and fermented beverages (like cider, mead, perry, or other forms of beer).
Digital tax stamps serve to level the playing field by combating illicit traders, including smugglers, who seek to sell untaxed products. They also provide a track and trace capability for goods throughout the supply chain, ensuring that standards are upheld for the well-being of consumers.