Overview:
During the initial stages of his drink’s production, a little over two years ago, Uzailu had always thought himself invisible. He knew the law required him to get Digital Tax Stamps (DTS) for his products, yet he chose to ignore it. He understood the danger, but he believed he could stay under the radar.
Katarakyi Uzailu, the owner of ‘Akaboozi’, the wildly popular energy drink, headquartered in Mbarara, never imagined he would one day stand before fellow manufacturers, and his clientele advocating for tax compliance.
He was one of several who attended the Digital Tax Stamp (DTS) sensitization sessions, which were conducted in a select number of districts within the South-western region between February 17th and 21st.
A manufacturer who understands the importance of compliance, Uzailu has taken it upon himself to educate his customers about the difference between stamped and unstamped goods. He warns them against buying illegal products to avoid facing the aching punishments he was a victim of.
During the initial stages of his drink’s production, a little over two years ago, Uzailu had always thought himself invisible. He knew the law required him to get Digital Tax Stamps (DTS) for his products, yet he chose to ignore it. He understood the danger, but he believed he could stay under the radar. Every day, through a painstaking manual process involving 35 workers, Uzailu produced about 500 cartons of Akaboozi, each selling at UGX 4,900 wholesale.
“Business was booming,” he says. It wasn’t long before Uzailu’s house of cards came tumbling down. “On one fateful day,” he recounts, “ the enforcement officers, on their usual patrol, found my products in the market, traced them to my quarters and fined me the maximum penalty.”
He is referring to the hefty fine of UGX 50 million, a legal penalty imposed on any manufacturer who fails to attach or activate a Digital Tax Stamp on specific taxable goods. This law was put in place to ensure compliance, but Uzailu had ignored it, and now he was paying the price.
The retailers and wholesalers of his products were also not immune to the same penalty. Caesar struck and struck hard. “I have been paying this amount in small installments, and I shall be clearing it soon,” Uzailu confirmed.
For Uzailu, this was his Saul-to-Paul moment, he never looked back and he attests to this with a cheer on his face. “From then onwards, we started acquiring tax stamps and now we are complying, and business is still booming,” he says with emphasis,” before adding, “You can go to the market and check all our products, they are all stamped, and at the right spots.”
Beyond following the law, Uzailu now sees the bigger picture. He acknowledges that DTS has brought order to the industry. “Before, anyone could start producing a drink overnight without proper certification. But now, businesses have to go through the right channels,” he explained.
He also admits that this proper certification creates a fair business community, where businesses are able to compete on fair and equal grounds. “This is important in any free market economy,” he stresses.
Introduced in 2019, Digital Tax Stamps are secure labels placed on excisable goods such as beverages, tobacco, and cement. Each stamp contains an encrypted code that allows URA to track the product’s movement throughout the supply chain. Consumers and tax officers can scan these codes to verify the product’s authenticity and tax compliance.
Kamukama Ivan, a tax educator who was leading the awareness campaign revealed to the manufacturers in attendance that since its introduction, more manufacturers have registered for DTS, boosting Uganda’s tax revenue. Additionally, he also revealed that the Uganda National Bureau of Standards (UNBS) works alongside URA to ensure all products meet safety and quality standards.
“This has been a crucial step in cleaning up a market once flooded with unregulated beverage companies,” he emphasizes. Ivan Kamukama, a URA Tax Education expert highlighted that URA’s outreach in the south-western region is part of a larger national effort to improve tax compliance, protect consumers, and create a fair business environment. With growing support from traders and local leaders, the DTS initiative is set to strengthen Uganda’s economy and promote responsible business practices.