Agnes Nabwire Asobola, the URA TID Commissioner
HABARI DAILY I Kampala, Uganda I The Uganda Revenue Authority (URA) has confiscated at least 1,370 bags of sugar in a widening investigation into alleged evasion of the Digital Tax Stamps (DTS) system, in one of the latest crackdowns on tax non-compliance in Uganda’s sugar industry.
The seizures followed intelligence-led operations in Soroti and Masaka, where URA officials impounded consignments of sugar linked to Kaliro Sugar Company that were found bearing inactivated digital tax stamps—a violation of tax regulations governing excisable goods.
Digital Tax Stamps were introduced on November 1, 2019, to curb tax evasion and illicit trade by creating a traceable digital trail from factory to market. The system requires all manufacturers and importers of excisable goods—including sugar, beer, soda, bottled water, cement, cooking oil, wines, spirits and cigarettes—to affix tamper-proof stamps to their products.
According to the 2024/25 Auditor General’s report, the DTS system has contributed to a 40 percent increase in government revenue collections over the past four years, with total revenue rising from Shs 22.098 trillion to Shs32.357 trillion. The increase has been largely attributed to reforms in tax administration and digital monitoring tools that have sealed loopholes previously exploited by tax evaders.
In Soroti, URA operatives confiscated 1,300 bags of sugar from two separate stores. According to URA, preliminary inspections using specialised Gizmo machines revealed that the digital stamps affixed to the bags had not been activated, meaning the sugar had likely entered the market without proper tax declaration.
“As a result, URA sealed the stores and referred the matter to the DTS enforcement office in Mbale for further investigations,” the authority said in a statement.
In Masaka, URA investigators also sealed a prominent retail outlet after discovering 70 additional bags of sugar, also traced back to Kaliro Sugar Limited, which lacked activated DTS. This brought the total number of impounded bags to 1,370, intensifying scrutiny on the company’s supply chain and distribution practices.
The operations were confirmed by URA Commissioner for Tax Investigations Jimmy Ekemu, who said the seizures were part of a broader probe into possible compliance breaches within the DTS regime.
Officials from URA’s Tax Investigations Department (TID) said the ongoing investigations aim to establish the total quantity of sugar released into the market with inactivated stamps and to determine how long the factory may have been distributing untaxed products.
“We are still investigating the matter and have widened our scope. We want to establish whether there were other quantities produced and released without activated DTS, and whether more sugar is still circulating on the market illegally,” a senior investigator said.
TID Commissioner Agnes Nabwire Asobola said the current operations are part of a sustained effort to restore fairness in the marketplace and protect compliant taxpayers.
“These operations are intended to restore fairness in the marketplace and encourage compliance. They are guided by verified intelligence, and all manufacturers, importers, distributors and retailers must fully comply with the DTS and Electronic Fiscal Receipting and Invoicing Solution,” Asobola said.
Kaliro Sugar factory, which is owned by Ashish Monpara of the Modern Group, has denied wrongdoing. An official from the company, who declined to be named, claimed competitors may have used their branded bags to package sugar.
“We follow the law. Those bags may not be ours,” the official said.
However, URA officials insist that strict penalties apply under Ugandan tax law for failure to comply with DTS regulations. Failure to affix digital stamps attracts a penalty of double the tax due or Shs50 million, whichever is higher. Tampering with stamps attracts double the tax or Shs20 million, while possession of unstamped products carries penalties of double the tax or Shs50 million.
As investigations intensify, URA says further seizures and prosecutions could follow, signaling a tough stance against tax evasion in Uganda’s sugar sector.
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