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HomeAfricaCar Importers Decry URA Directive On Clearance

Car Importers Decry URA Directive On Clearance

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By Julius Mugaga/KMA Updates.

Kampala, Uganda: It is not just to clear cars at the port of entry, its hard for our agents and us buyers – KACITA to URA.

Car bond in Uganda/Courtesy Photo.

A week back , Uganda Revenue Authority publicized a directive to motor vehicle importers issuing that with effect from 1st July 2022 all cars of  9 years and more from the date of  manufacture will be cleared at the port of entry that is either Mombasa or Dar es Salaam not  warehouse arrangement as it has been an issue that stirred up Kampala City Traders Association (KACITA).

To KACITA, this act is going to create an increase in the cost and prices of since the issue of liquidity issues are going to create scarcity of the vehicles on the market.

Thadeus Musoke Nagenda, Administrator General Kampala City Traders Association. Photo by Julius Mugaga.

“We need to all appreciate that 95% of the Ugandans buy these vehicles on installment basis while many others can’t even afford to buy bonded vehicles. This has been possible through the warehousing regime which allows vehicle importers to warehouse them up to 270 days”. KACITA notes.

They say, the Customs Act provides for 270days (9 months) as the warehousing period of any goods imported into the country of which the above sector has been so compliant till to date, the directive will therefore render all warehouses empty and redundant since there will be nothing to warehouse anymore and this renders this investment polio affected.

KACITA says following several petitions received from their membership in line sector, of which they have escalated further to policy makers (Ministry of Finance, Planning and Economic Development) and other line ministries (Ministry of Trade, Industry and Cooperatives) and policy implementers (Uganda Revenue Authority), made observations and concerns below;

The directive coincided with the entry of the DRC into the East African Community which provides and widens the market for their business community since most DRC citizens do access the same goods through Uganda while a bigger percentage buy from our Ugandan market.

Liquidity, The business community usually does not have ready cash to execute transactions all through without resorting to borrowing, whereby most Businesses operate using borrowed money, in this regard, banks and other credit facilitators have to verify goods, in this case Vehicles before extending the Facility.

Security of Vehicles in transit,  A number of vehicles in transit have been stolen, even before their final clearance, which raise more fears, once final clearance is done thus taxes paid at port of entry, rendering these Vehicles high risk since the interest of URA lies with Taxes.

Loss of jobs to over 3000 people in this sector, Especially casual laborers and many others who constitute a big percentage without mentioning families and other dependents.

Loss of re-export business since most of the imported units are meant for foreign and export purposes (in Transit) and compelling all these consignments to be cleared at the ports of entry means that we are bound to lose this market while those cleared at the port of entry will rendered uncompetitive on the market together with its revenue that had been coming in as taxes.

Therefore KACITA informs that the directive be subjected to immediate withdrawal of since it is not economically viable to all parties in this business.

 

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