Digital Tax Stamps Boost Efforts to Combat Counterfeit Goods in East Africa's Cement Industry
East African cement manufacturers are increasingly using Digital Tax Stamps (DTS) to tackle counterfeit products, enhance tax compliance, and ensure product integrity. The Uganda Revenue Authority introduced DTS in 2019 to digitize tax administration and curb revenue leakages in key sectors like cement. Since then, the system has successfully reduced smuggling, ensuring that only certified products reach the market.
Simba Cement, a leading player in the region, highlighted the positive impact of DTS during a recent media briefing. Heet Raval, the company’s Sales and Marketing Manager, emphasized how the system has helped regulate product quality and pricing by ensuring equitable tax payments. "DTS has made it difficult for poor-quality, smuggled products to enter the market," Raval noted.
According to data from the Uganda Revenue Authority (URA), DTS has increased the number of registered local excise duty importers and manufacturers significantly. As of May 2024, excise duty importers grew from 55 to 212, while manufacturers rose from 119 to 689, showcasing growth rates of over 200% and 600%, respectively. This surge has helped promote fair competition and increase revenue collection, contributing to Uganda’s economic stability.
Simba Cement's recent investment in a new clinker plant in Kenya further underscores the company's commitment to lowering production costs and enhancing competitiveness. By reducing the need for expensive clinker imports from overseas, Simba Cement has been able to lower its prices, forcing competitors to follow suit.
The role of DTS in maintaining market integrity is not just limited to Uganda. Pakistan have also attempted to introduce digital tax stamps in sectors such as tiles and cement to regulate market practices, showing the broader applicability of such systems in combating counterfeiting across various industries.
