Government to lose Shs180b in old cars ban

Kampala. Government risks losing more than Shs180b in tax revenue if it goes ahead to pass the proposed Traffic and Road Safety (Amendment) Bill, 2018, according to Uganda Revenue Authority.
The proposed Bill, according to Mr Vincent Seruma, the URA head of public and corporate affairs, will affect revenue collection but will facilitate economic development in the long run.

“EAC heads of state agreed to ban these vehicles [older than 10 years] and Kenya has already done it. If Uganda also slaps a ban, it makes our country more attractive for investment. Our students are acquiring skills, which they will use in the long run to build our own cars,” he said in an interview.
Whereas the ban, he said, will make government lose about Shs180b, it is a strategic decision that will spur economic development.
The Bill, which is before a committee of Parliament, seeks to ban importation of cars that are older than eight years.

This, analysts say, will in turn make buying a car an expensive affair and will affect other auxiliary businesses such as bonds, clearing and forwarding agents, insurance firms, spare parts dealers and car service points.
On average, Uganda imports about 40,000 cars per year, majority of which are older than 10 years.
“The importation [of cars] actually erodes the value of our currency and the economy at large. If we set up our own assembly plants they will create jobs and boost investment. So the issue is not the revenue correction loss, it is a long term strategy,” Mr Seruma said.

Kiira Motors Corporation, a project that seeks to drive Uganda’s car industry has already been allocated Shs140b to drive the car manufacturing agenda, which in the long run will promote local capacity.
Prof Sandy Steven Tickodi, the Kiira Motors Corporation chairman, said in an interview that they hope to produce their first bus by 2020.
“By the end of 2019 and early 2020, we shall have buses ready. The issue of banning import of old cars is not directly related to our production,” he said, adding “pickup and other smaller cars will come later”.
Mr Frank Tumwebaze, the ICT and Information minister, told Daily Monitor that Cabinet had already reached the decision (to ban cars older than eight years).

He referred this reporter to Mr Matia Kasaija, the Finance minister to understand the extent of the loss in terms of revenue.
However, efforts to get a comment from Mr Kasaija proved futile as our calls to his known mobile phone went unanswered by press time.
Car importers have petitioned government to pursue a phased ban extending the period to 15 years.
“We propose gradual phasing out of these vehicles starting with a 15 year threshold,” Mr Waqas A Pasha, the director of Tadashii Trading Company, said.

Exempted

Special purpose cars. The Bill, however, exempts special purpose cars such as breakdown lorries, crane lorries, fire fighting vehicles and concrete mixer lorries.
Others are road sweeper lorries, spraying lorries, mobile workshops, forklifts, mobile drilling rigs and mobile radiological units.
Also exempted are work trucks, tanks and other armoured fighting cars, cesspool emptiers, water bowsers, bullion spreaders, bitumen spreaders, bucket trucks, aircraft re-fuellers, spraying trucks, workshop vans and mobile banks.

Agricultural or forestry tractors, earth moving motor vehicles, dumping machines and road rollers are also exempted.
However, the Bill if effected, will not affect vehicles that are already in transit.
The Bill, signed by Works minister Monica Azuba Ntege also proposes revisions of car registration fees and the environmental levy.

[email protected]