DTS technology combating substandard construction materials

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KAMPALA - The Uganda Revenue Authority's (URA) implementation of Digital Tax Stamps (DTS) has garnered widespread praise from cement manufacturers. 

They have lauded the initiative as a crucial tool in combating the proliferation of substandard and illicit cement products in the market.

Simba Cement, a prominent player in the industry, has been at the forefront of embracing DTS. 

Heet Raval, the company's Marketing Manager, emphasized the technology's effectiveness in curbing the smuggling of counterfeit cement across Ugandan borders. 

"Prior to DTS, the market was inundated with fake construction materials. However, this initiative has significantly reduced their presence," Raval stated.

Beyond curbing illicit trade, DTS has also contributed to increased government revenue by ensuring that all cement products are appropriately taxed. 

"This additional income can be allocated to critical services and infrastructure development. Moreover, DTS has fostered healthy competition among cement manufacturers, resulting in lower prices for consumers," he added.

Simba Cement has played a pivotal role in driving price reductions within the industry.

While the implementation of DTS has been largely successful, challenges persist as last month police apprehended an individual involved in the seizure of over four tonnes of counterfeit cement bearing the labels and falsified digital tax stamps of reputable manufacturers. 

The incident underscored the ongoing need for vigilance and enforcement to prevent unscrupulous individuals from exploiting the system.

Uganda National Bureau of Standards (UNBS) has also raised concerns about the prevalence of counterfeit goods in the Ugandan market, which poses significant risks to both consumers and the economy. 

By addressing the issue of counterfeit cement, DTS contributes to the overall health and integrity of the market.

URA launched DTS initiative in April 2019 as a means to combat illicit trade and seal revenue leakages. 

Clare Musiime Bakanga, the URA Head of Change Management for Digital Tracking Solutions, highlighted the challenges faced by traders and businesses due to unfair competition from those smuggling goods into the country.

Digital tax stamps are physical paper stamps applied to goods or their packaging. 

These stamps contain security features and codes that prevent counterfeiting and tampering. They also have track-and-trace capabilities, enabling consumers to verify the authenticity of products, traders and manufacturers to track product movement, and the government to monitor product compliance.

A quick response code (QR code) allows distributors, retailers, and consumers to use a smartphone app to verify the authenticity of products. 

When stamps are placed on products, they are recorded on both the manufacturer's server and the URA's digital server. This allows the government to track the production and distribution of cement and ensure that the appropriate taxes are paid.

Musiime said Digital Tax Stamps has been a game-changer for Uganda's cement industry, curbing illicit trade, enhancing quality control, increasing government revenue and contributing to a more robust and sustainable sector. 

However, while challenges remain, the continued implementation and enforcement of the initiative are essential for the long-term health and prosperity of Uganda's construction industry.