Uganda: Ura warns dealers selling illegal, unstamped cigarettes
The Uganda Revenue Authority (URA) has warned retailers and dealers selling unstamped cigarettes and other illegal tobacco products, saying they risk heavy penalties for trading in unauthorized goods.
Speaking in an interview yesterday, URA Acting Commissioner for Public Affairs and Corporate Communications Mr. Ian Rumanyika said the law prohibits the sale of digital tax stamps to products published in the Official Gazette, noting that anyone who assists in their sale or circulation for further consumption is breaking the law and is reliable to a term or a term of imprisonment or both when convicted.
“All cigarettes and tobacco products must have digital stamps. We will penalize anyone found selling or assisting in the trade of illegal cigarettes,” he said, noting that as of 20 September, the URA will step up law enforcement operations across the country to ensure full compliance with tax law, which includes digital tax stamps.
Mr Rumanyika was responding to concerns about an increase in the sale of unstamped cigarettes and tobacco products that flout the law provided for in the 2015 Tobacco Control Act.
In a notice earlier this month, the URA warned manufacturers, distributors, retailers and agents that they risk paying a criminal tax equivalent to double the tax due on goods or Shs 50 million for the distribution and trade of digital stamp vouchers.
The URA also noted that these goods or the persons trading in them would be subject to other enforcement measures, including foreclosure, closure of business premises, garnishment proceedings or prosecution.
The market has seen an increase in the sale of illegal cigarettes which not only contravenes the Tobacco Control Act 2015, but causes heavy losses to the government in terms of taxable income.
In a mini-survey conducted by Daily Monitor earlier this week, it was found that unstamped and flavored cigarettes and poorly packaged tobacco products that do not meet the prescribed weight are openly sold in retail stores in Kampala. , in violation of the law and the tax code.
For example, a number of imported cigarette products such as Oris from Germany have been found to violate almost all laws under the Tobacco Control Act and do not feature digital tax stamps.
Yesterday, Mr Rumanyika said that while the URA is not aware of how the products find their way to the market, they will investigate the matter to understand their source and prosecute those who sell such products.
Under the Tobacco Control Regulations, 2019, it is illegal for anyone to trade in cigarette products with a single package containing more or less than 20 sticks or tobacco products weighing more or less than 20 grams.
The law also prohibits any descriptive language such as ultralight, smooth, cool, natural, and any other word that seeks to confuse a consumer’s attention from understanding the danger of smoking or tobacco use.
The law also requires that tobacco products be packaged in a way that expressly warns consumers of the dangers associated with smoking and the use of tobacco products.
“A health warning must not be able to be distorted, damaged, concealed, obliterated, removed or made illegible when the packaging on which it is printed is opened,” notes in part the 2019 Tobacco Control Regulations.
Uganda, according to a 2017 report detailing the health cost of tobacco use in Uganda by Nigar Nargis, Kellen Nyamurungi, Sebastian Olakira Baine and Daniel Kadobera, is losing Shs 328.82 billion per year in terms of mortality and health care costs due to illnesses resulting from tobacco use.
Despite the associated dangers, tobacco continues to be consumed both on the open market and on the black market. In May, British American Tobacco Uganda (Batu), which is one of Uganda’s largest tobacco traffickers, declared the smuggling and illicit trade in cigarettes to be serious threats to health and sustainable trade.
For example, the company said, the illicit trade in cigarettes was reaching worrying levels, noting that a third-party study indicated an increase in the incidences of illicit trade, which, during the period, reached 17.4 % at the end of December 2020.