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Uganda is stepping up its fight against counterfeit goods and tax evasion with the use of Digital Tax Stamps (DTS), a system introduced in 2019 to track products, improve revenue collection, and protect consumers. For years, counterfeit goods have quietly flooded Uganda’s markets, costing government millions of dollars, reducing legitimate business earnings, and putting the lives of ordinary people at risk through fake medicines, expired food items, and substandard products.
Digital Tax Stamps are special coded labels applied to goods by manufacturers or importers. They carry encrypted information such as serial numbers, expiry dates, product details, and tax records. This data can be scanned instantly by authorities and even by ordinary consumers using smartphones through a government-backed mobile application called Kakasa. For the first time, Ugandans now have the power to confirm at the point of purchase whether an item is authentic, taxed, and safe for use.
Initially, the system was applied to high-risk goods such as alcohol, tobacco, soft drinks, and pharmaceuticals. Over time, the scope expanded to cover cement and other listed items, making DTS a central feature in the country’s trade and tax monitoring framework. For example, beverage producers are not allowed to sell their products in the market unless they integrate the tax stamps into their production lines.
Government officials argue that the benefits outweigh the costs. According to the Uganda Revenue Authority (URA), the stamps ensure that tax revenue is collected, create a fair playing field for honest businesses, and reduce the circulation of harmful counterfeit goods. In the long run, this improves both consumer safety and national revenue.
However, not everyone is pleased. Small-scale manufacturers complain that applying DTS is costly and affects their profit margins. They argue that the technology and compliance requirements create an additional financial burden. But tax experts counter that the system, if managed properly, will benefit everyone, including the small players, by ensuring counterfeit goods do not outcompete genuine products.
Enforcement has been strict. Authorities frequently seize goods without DTS and destroy them in specialized facilities such as Luweero Industries Ltd in Nakasongola District. In 2023 alone, more than 10,000 tons of counterfeit goods were destroyed, including 3,000 tons of beverages and thousands of tons of fake cement. Every truckload destroyed represented lost tax revenue and unfair competition against businesses that followed the law.
Still, officials admit that DTS is not a complete solution. Counterfeiters are smart and adapt quickly to new enforcement strategies. As a result, Uganda’s government insists that DTS must be part of a wider strategy that includes strong law enforcement, tougher penalties for offenders, and stronger collaboration with the private sector. Experts also emphasize the need for more consumer education so that ordinary Ugandans can recognize and reject fake products.
International cooperation is another key factor since many counterfeit goods enter Uganda through cross-border smuggling. Regional partnerships with neighbouring countries are expected to improve tracking and reduce cross-border circulation of fake products. At home, expanding digital literacy and access to smartphones is vital, especially in rural areas, so that all citizens can use the verification tools effectively.
For businesses, the system has advantages beyond paying taxes. Digital Tax Stamps protect company brands from counterfeiting, build consumer trust, and help firms avoid penalties from regulators. A producer that can prove its product is genuine gains an advantage in a competitive market. For consumers, the stakes are even higher. A single scan of a digital stamp on a packet of medicine could mean the difference between life and death.
The Ugandan government has positioned DTS as central to its modern tax regime and as a key part of its plan to create a transparent and fair marketplace. Officials argue that the system is already reshaping compliance, strengthening consumer confidence, and narrowing the space available for counterfeiters. While experts admit that the stamps alone cannot completely eliminate counterfeiting, they agree that the progress made so far is undeniable.
As one URA tax official explained, “Every stamp scanned is not just proof of tax — it is proof of trust.” With continued investment, stronger enforcement, and public awareness, Uganda believes it can use DTS to protect revenue, businesses, and citizens from the dangers of fake goods.
