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MPs block URA request for sh97b digital stamp project

By Mary Karugaba

Added 23rd May 2019 07:59 AM

The digital tracking solution had a financial request of sh97b but would cost over sh129b when fully implemented

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(L-R) State minister of finance David Bahati, finance ministry budget director Kenneth Mugambe and URA commissioner general Doris Akol during their appearance before the budget committee of Parliament. Photo by Kennedy Oryema

The digital tracking solution had a financial request of sh97b but would cost over sh129b when fully implemented

Members of Parliament have blocked the approval of sh97b requested by Uganda Revenue Authority to implement the digital stamp tracking project.

The MPs on the Budget Committee said the money requested by URA to finance the project should not be approved until a thorough investigation on the project is done.

This was after the URA officials led by the commissioner general Doris Akol on Wednesday failed to explain a number of questions put to them by the MPs in regards to the project implementation and financing.

“A number of questions have not been answered yet this is a complex project that requires a thorough review. In my opinion, you have not given us all the answers we need and we think you should provide more explanation,” committee chairman Amos Lugolobi ruled after hours of grilling of the officials.

Akol had appeared before the committee to defend a financial request of sh105b for digital stamp tracking system and e-tax system

The digital tracking solution had a financial request of sh97b but would cost over sh129b when fully implemented.

The system was developed to track and trace products from production or importation to the final distribution.

According to Akol, the system is to be applied only on locally manufactured or imported excise goods such as cigarettes, beers, spirits, wines, soda and water.

The system was introduced to protect government revenues, combat trade in illicit, substandard or counterfeit products, protect consumers against harmful products and enhance fair competition in the market.

Akol informed the MPs that once the funds have been approved, the Authority plans to start the implementation in July 2019.

“Although not yet implemented, we plan to start the implementation in July for some product and September for others. It will help us track the products from production to the final destination,” she said.

But Lubobi wondered why the request was being presented, a few days to the end of the Budget process.

 “All these were planned activities, why wasn’t the money put in the budget. Why are you presenting it now?” he asked.

Last week, the Parliamentary Finance Committee chairman Henry Musasizi informed the Committee that the money was neither included in the budget of neither URA nor part of the unfunded priorities.

The Finance Committee oversees the activities of URA.

Akol explained that the money was not included in the budget because after local manufacturers raised concerns and declined to incur costs of the stamp, Cabinet discussed the matter and agreed that government incurs the cost of the stamp for the first year and later reverts it to the manufacturers.

“When Cabinet agreed that we incur the costs, URA procured the services of SICPA South Africa and a contract was awarded and signed on October 4, 2018,” she said as members bombarded more question.

MP Stephen Mukitale asked the officials to explain whether URA had signed a memorandum of understanding with the manufacturers would incur the cost of stamping after the government has pulled out.

“They rejected the proposal originally, how sure are you that when after one year they will accept to pay? Have you talked to them?” Mukitale asked as Akol just looked on.

The MPs also asked the officials to explain why the Authority signed a contract with SICPA even before securing finances.

“According to the commitment system, you are not supposed to commit the government to any expenditure when you have no money. Who allowed you to sign a contract with SICPA when we had not yet approved the money?” MP Patrick Isiagi asked as Akol kept silent.

After failing to get adequate answers on the project, MPs Muwanga Kivumbi (Butambala),  Okoth Othieno (West Budama North ) and Isiagi proposed that the approval be stayed until a thorough investigation is done.

Other MPs asked Akol to explain why SICPA was procured through restrictive and not competitive bidding.

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