Govt moves to ban ‘old’ car imports

Agricultural or forestry tractors, earth moving motor vehicles, dumping machines and road rollers are also not affected by the Bill

Used cars in a local bond. The Bill seeks to ban importation of vehicles of eight years old from the date of manufacture. PHOTO BY ABUBAKER LUBOWA 

BY SOLOMON ARINAITWE

IN SUMMARY

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Ugandans will not be allowed to import vehicles of eight years old or more from the date of manufacture if a controversial government Bill before Parliament is approved.
The Traffic and Road Safety Act 1998 (Amendment) Bill, 2018 tabled on Tuesday, also proposes that a person who imports a motor vehicle which is five years old or more from the date of manufacture shall pay an environmental levy on that vehicle.
The environmental levy shall be collected by the Uganda Revenue Authority before clearance of the vehicle.

Exemptions
The vehicles exempted from the impending ban are special purpose motor vehicles including: breakdown lorries, crane lorries, fire fighting vehicles, concrete mixer lorries, road sweeper lorries, spraying lorries, mobile workshops, forklifts, mobile drilling rigs and mobile radiological units.
Other vehicles exempted from the ban are work trucks, tanks and other armoured fighting vehicles, cesspool emptiers, water boswer, bullion spreaders, bitumen spreaders, bucket trucks, aircraft refuellers, spraying trucks, workshop vans and mobile banks.
Agricultural or forestry tractors, earth moving motor vehicles, dumping machines and road rollers are also not affected by the Bill.
Motor vehicles which are in transit before the commencement of this Act and which arrive in Uganda by September 30, 2018 will also be exempted from the ban.
Although the proposed ban on old vehicles came from MPs on Natural Resources Committee in 2013, some MPs have threatened to block the amendments in public and argued that the proposed ban on importation of old vehicles will not solve the problem of pollution because it would not remove those that are already on Uganda’s roads.
Those against the proposed amendments argue that in a country that does not manufacture vehicles, few Ugandans can afford new cars.
The estimated average transaction price of a new car is about Shs65 million compared to the used ones that cost between Shs10 million and Shs20 million.
The contentious Bill signed by Works and Transport minister Monica Azuba Ntege also proposes revisions on car registration fees and the environmental levy imposed on imported cars.
The new Bill, according to sources, was passed by Cabinet two weeks ago and the Prime Minister, Dr Ruhakana Rugunda, tasked Ms Azuba to present it for First Reading in the House. Deputy Speaker Jacob Oulanyah has since asked the Physical Infrastructure committee to scrutinise the Bill.
Other legislators led by Rubanda East MP Henry Musasizi, who chairs Parliament’s Finance Committee, argued that the proposed legislation will resolve the problem of importation of old vehicles after tax measures failed to deter motorists from importing old vehicles.
“Why should we be a dumping ground? When you go to some countries-let me use the example of Namibia, you cannot import a vehicle which is more than five years old whereas in Uganda you can import a vehicle of 1998,” Mr Musasizi said.
“There is no limit and in so doing Uganda has become a dumping ground for the used vehicles. It’s something that needs to be checked. We had thought we would limit it by taxes but it did not work.”

Opposition
In May 2016, the MPs rejected a proposal mooted by the then Shadow Finance minister Geoffrey Ekanya, who in a minority report had proposed an outright ban on used vehicles and a reduction of the taxes on new vehicles. The Ekanya proposal was also meant to ensure government collects more than Shs7 billion it hoped to raise from this levy in the 2015/16 fiscal year.
The MPs who were considering the Finance (Amendments) Bill 2015 had also proposed that motor vehicles that are 10 years and older should be charged a 50 per cent levy, and not the 35 per cent the government had suggested. The proposed amendments, according to government are meant to protect the environment from vehicles that release dangerous fumes into the atmosphere.
In a joint statement, issued in February 2015, regional leaders had also directed the Council of Ministers to study modalities for the promotion of motor vehicle assembly with a view of stopping or reducing the importation of used vehicles in East Africa.
In trying to discourage importation of old vehicles, in 2009, East African Community leaders also imposed a common external tariff (CET) of 25 per cent on motor vehicles imported into the region as leaders sought to promote local vehicle assembly.
This however, did not stop importation of used vehicles into the region, compelling Uganda government to amend the law and slap a ban on importation as a ‘lasting’ solution to pollution.
Kenya and Rwanda have already banned the importation of cars that are more than 10 years old on the road.

Environmental Levy

35 per cent of the CIF(Cost, Insurance and Freight) Value: A motor vehicle which is five years old but which does not exceed eight years from the date of manufacture; excluding goods vehicles
50 per cent of the CIF Value:
A motor vehicle which is eight years old or more from the date of manufacture which was imported or is in transit before the commencement of this Act, and which arrives in Uganda by September 30, 2018.
20 per cent of the CIF value:
A motor vehicle which is five years old or more and which is principally designed to carry goods.

Proposed registration fee

Shs1.5m: Sedan cars, saloon cars, estate car but excluding dual purpose goods passenger vehicles.
Shs1.5m: Passenger vehicles ,including light omnibuses with a seating capacity not exceeding 28 passengers.
Shs1.7m: Estate and station wagon vehicles with an engine capacity of 3500 cc or above.
Shs1.5m: Medium omnibuses and heavy omnibuses with a seating capacity of more than 28 passengers.

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