Digital Tax Stamps propel Uganda’s revenue growth

KAMPALA - The Uganda Revenue Authority (URA) has recorded a 40 per cent increase in revenue collections, reflecting improvements in tax administration over the last four years, according to the 2024/25 Auditor General’s report.

The report shows that total government revenue rose from shillings 22.098 trillion to 32.357 trillion, a 10 trillion increase attributed largely to reforms in tax administration, particularly the use of digital tools that have transformed how taxes are declared, tracked and enforced.

Central to this shift is the Digital Tax Stamp Solution, which was introduced to strengthen integrity in the excise duty regime.

DTS involves affixing tamper-proof digital stamps to excisable goods at production or import points, creating a traceable digital trail from factory to market. The system is implemented by SICPA Uganda under the aegis of URA.

Through real-time monitoring, DTS has helped close loopholes that previously allowed untaxed goods to circulate on the market.

Over the review period, customs and excise revenues grew by 29 per cent, alongside strong performance in Value Added Tax and income tax collections, underscoring the broader impact of digital enforcement.

Beyond revenue gains, DTS has also influenced market behaviour in sectors that were previously distorted by illicit trade. Simba Cement Uganda is among the manufacturers that have publicly endorsed the system.

A company official said digital tax stamps make it easier to identify genuine cement products and ensure all taxes due are paid, promoting fair competition in the market.

At the policy level, government officials have underscored the role of digital enforcement tools in domestic revenue mobilisation.

Speaking at the launch of the 2025 Uganda Economic Update, the Acting Permanent Secretary and Secretary to the Treasury, Patrick Ocailap, said digital systems were helping the government raise revenue without increasing tax rates.

“The use of digital systems is great for our country and will help URA collect more revenue, such as digital stamps on everyday products that we find in the supermarkets,” Ocailap said, adding that the focus was on widening the tax base through improved compliance.

President Yoweri Museveni has also identified DTS and the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) as key tools in the government's revenue and anti-corruption agenda.

In his 2025 State of the Nation Address, the President said the Government would intensify audits at URA and expand the use of digital systems to reduce human interaction in tax processes.

“Digital Tax Stamps and EFRIS are key to ensuring accurate revenue declarations,” Museveni said.

According to URA, compliance has continued to improve since the introduction of DTS, with the number of registered DTS taxpayers under the system rising to 1,680.

The DTS regime currently applies to alcoholic beverages, including beer, beer kegs, spirits, wine and fermented beverages; ready-to-drink products, juice, soda and other soft drinks; cement; cooking oil; sugar; tobacco; and bottled water.

URA says this broad coverage has enhanced visibility in sectors historically associated with under-declaration, counterfeiting and illicit trade.

The rollout of DTS was carried out in phases to allow manufacturers and importers time to integrate the required technology. Initially introduced in the 2019/2020 financial year for excisable beverages and tobacco products, the system was later extended to include a growing list of products.

While the Auditor General notes that the transition to digital enforcement came with early implementation challenges, the report indicates that longer-term compliance gains have outweighed initial disruptions, supported by improved access to real-time production and import data.

According to URA, Enforcement has intensified alongside the expansion of the system. It states that the Tax Investigation Department (TID) has carried out targeted operations to curb revenue leakages and combat illicit trade. In December 2025, TID officers seized more than 3,000 cartons of unstamped spirits, commonly known as waragi, valued at about sh50 million.

The Acting Commissioner of TID, Agnes Nabwire, said enforcement increasingly relies on digital intelligence rather than physical inspections.

“The TID remains active behind the scenes, using systems such as EFRIS and DTS to track non-documented or under-declared shipments,” she said.

While the Auditor General, Edward Akol, cautioned that Uganda’s tax base remains narrow and concentrated in a few sectors. He noted, however, that improvements in tax administration provide an important pathway toward stronger domestic revenue mobilisation.

Akol said that as the government targets sh37.2 trillion in revenue in the 2025/26 financial year, digital systems such as DTS are increasingly viewed as key tools for supporting sustainable revenue growth while protecting compliant businesses and consumers.