Overview:
Digital tax stamps are vital for Uganda's economic health, the World Bank says, urging the government to sustain digital reforms to close the fiscal gap.
KAMPALA – The introduction of digital tax stamps is being hailed as central to Uganda’s fiscal strategy, with the government and the World Bank insisting that maintaining the technological reform is critical for closing the nation’s revenue gap.
The focus on digital collection methods was highlighted at the launch of the 25th Uganda Economic Update on 30 September. The report, produced by the World Bank, suggests technology and improved governance are the keys to boosting state revenue and strengthening public service delivery.
Patrick Ocailap, the Acting Permanent Secretary and Secretary to the Treasury, said at the launch that digital systems were “great for our country” and would help the Uganda Revenue Authority (URA) collect more money, citing the digital stamps found on supermarket products.
Mr. Ocailap stressed the need to expand the tax base rather than imposing higher taxes on the public.
Digital Tax Stamps, launched in 2019, are unique, traceable seals affixed to excisable goods, including beer, spirits, wine, soda, bottled water, cement, and tobacco. The system allows the URA to verify tax compliance and control illicit trade as goods move from production into the market.
The URA reports that the system has seen steady growth. By mid-2023, more than 1,100 manufacturers and over 300 importers had registered on the platform, a significant increase since its inception. Officials note that compliance improved sharply, with a 23% rise in registered manufacturers in the first six months of 2023 alone.
Francisca Ayodeji, the World Bank Country Manager, pledged to continue supporting Uganda’s revenue efforts. She explained that improving compliance and broadening the tax base are “critical to creating the fiscal space” needed for essential investments in health, education, and social protection.
The World Bank’s update, however, cautions that tax collection gains must be matched by efficient and transparent public spending. The government projects that if these reforms are implemented effectively, the economy could grow by more than 6% in the current financial year, with further expansion forecast for 2026.