TRADE:  East African Business Council (EABC) yesterday called for a reduction in the cost of the Digital Tax Stamp (DTS) system, which has been implemented in the region, to improve revenue collection on excisable goods.

It said reduction in costs would enable small-scale manufacturers comply with DTS regulations, improve sustainability, and further boost revenue collection.

The council argued that a relatively lower and uniform price for DTS would make it easier for firms to adopt the new technology.

“The main challenges faced by manufacturers in the implementation of DTS are the cost of stamps, equipment installation, and operation of the system,” said John Bosco Kalisa (pictured), EABC chief executive said in a statement.

Revenue authorities

He said EABC would want to see the governments of the East African Community states, through their revenue authorities, take quick action to reduce digital tax stamp costs by reviewing existing DTS contracts with a view to reducing the high excise stamp fees imposed on manufacturers.

Data provided by the council indicates that the cost of the stamp differs significantly in each country. The stamp fee is additional to the excise duty tax payable under the country’s respective Excise Act, hence, double taxation for manufacturers.

The cost of excise stamps is disproportionately apportioned to different products with no justification with the cost paid going to foreign DTS supplier and not to the government’s revenue authority.

“The EABC urges revenue authorities to explore ownership of the digital tax stamp system through Build, Operate and Transfer model to limit capital flight. In the long run, the DTS system should not impose any financial burden on manufacturers,” Kalisa said.

Improve compliance

He called on revenue authorities to sensitise the public on the validation of tax stamps to improve compliance and discourage counterfeiting in the region adding that consumers of excisable goods should be able to verify the authenticity of the stamps through the applications provided by the revenue authorities.