The government has summoned all manufacturers in Uganda to a crucial meeting on September 4 to address concerns regarding the implementation of the Digital Conformity Mark (DCM) system.
State Minister for Investment and Privatisation, Evelyn Anite, announced that the meeting, to be chaired by the Prime Minister, aims to resolve issues raised by manufacturers about the costs associated with digital stamps, which they claim are significantly cutting into their profits.
The DCM system, recently introduced by the Uganda National Bureau of Standards (UNBS), mandates the use of digital marks or stamps on certified products. This initiative is intended to provide consumers with proof that the products meet quality standards.
“There are many investors who have raised concerns about this new tax. To address these issues, we have organized a one-day conference with all stakeholders, including technical experts from the Ministry of Trade, UNBS, the Ministry of Finance, the Secretary to the Treasury, the Commissioner General of URA, and the Commissioner of Domestic Tax,” Ms Anite said.
She added, “After we’ve discussed, if we reach a harmonized position, we will take it back to Cabinet, and then to Parliament.”
Ms Anite made these remarks during a visit to the Movit factory in Nyanama, where she met with the company’s management to discuss their concerns. Robert Kitenda, Movit’s head of communications and corporate affairs, highlighted the significant financial impact of the digital stamps on their operations.
“The cost of using the digital tax stamps has seen us spend over Shs1 billion in the last four months, compared to only Shs300 million spent in all of 2023. The new Digital Conformity Mark has increased our certification costs by more than 20,000%,” Mr. Kitenda said, requesting a reduction in costs to support the company’s operations.
In response, Ms Anite acknowledged the high costs and assured that the issue would be addressed at the upcoming meeting. “We know that the charge is currently 21 shillings, and we will look into revising it down. This will be discussed in the presence of the Prime Minister,” she stated.
The minister also mentioned that the meeting would cover other taxation issues, including the 10% excise duty that Movit officials described as detrimental to their growth.
“We shall also discuss taxation concerns, including the 10% excise duty. The meeting will be held at Hotel Africana, starting at 8 a.m., and we urge all stakeholders to attend in person,” Ms Anite said.
Additionally, Ms Anite pledged 50 acres of land to support Movit’s expansion plans, offering the land free of charge in any part of Uganda that the company prefers.
“The land is available, and we will provide it free of charge. Whether in the north, east, west, or central Uganda, the choice is yours,” she said.
The minister emphasized the importance of local manufacturing to reduce reliance on foreign products and encouraged Movit to continue expanding into East African markets and beyond.
Simpson Birungi, the founder and CEO of Movit Group of Companies, expressed gratitude for the minister’s visit, which he said highlights the government’s commitment to supporting local businesses and the vital role they play in Uganda’s economic development.
“We take immense pride in our journey, from a small shop in Kikuubo to operating manufacturing plants in over 10 African countries,” Mr Birungi said.
In response, Ms Anite remarked, “Local investors like Movit are not just contributors to the economy; they are role models for budding entrepreneurs. They produce quality products that meet export standards, create jobs, and utilize local expertise. The ministry is committed to ensuring that local investors not only survive but thrive.”
