Car imports fall by 1,077 units, revenue collection increases

Wednesday February 13 2019

Drop. Car imports have fallen due to a ban on

Drop. Car imports have fallen due to a ban on the importation of cars beyond 15 years. FILE PHOTO 

By Dorothy Nakaweesi

Kampala. Motor vehicle imports fell by more than 1,000 units mainly because of a ban on cars older than 15 years, according to data obtained from Uganda Revenue Authority.
Dealers have up to March to clear all stock of cars that are older than 15 years following a ban that was implemented in September last year.

According to data from URA, car imports in the first half of the 2018/19 financial year declined to 26,814 units down from 27,891 for the period running between July and January, representing a 3.86 per cent fall.
However, taxable revenue collected in the period under review increased from Shs303.1b in to Shs340.6b, indicating that the ban has had no impact on revenue collections.
Mr Dickson Kateshumbwa, the URA commissioner customs, told Daily Monitor, the ban on importation of cars older than 15 years had not affected tax collection but had only and minimally impact the number of units imported.

“We used to clear about 4,000 units but now clear around 3,800 per month. The impact has not yet been felt. People [could] have moved on,” he said, noting that there is no need to reverse the policy.
Mr Francis Kanakulya, the Associated Car Dealers spokesperson, last week said they had been given up to March to sell off all stock that is older than 15 years, which exposes them to losses.
URA in September the deadline that it had instituted for all cars dealers to have cleared stock of cars older than 15 years was extended.
However, Mr Kanakulya said the extension is likely to end before they can clear all the stock.

“We used to import about 50,000 cars every year, 80 per cent of which were above 15 years. After the ban, roughly 25,000 were still in the bonds so between then and now they are only coming out,” he said.
In June last year, Parliament passed a law that banned importation of cars manufactured earlier than 2003 with government saying the cars had become costly in terms of managing the environment.
Mr Kanakulya told Daily Monitor, it was premature to tell the impact of the ban but indicated there had been a revision in the pricing regime northwards. A car that had been priced at Shs16m, he indicated, will nologer be on the market but improved versions of the same car will cost much more.

Mr Issa Ssekitto, the Kampala City Traders Association spokesperson, told said last week that some of their members had already reported a decline in sales.

“Cars beyond 15 years were fairly priced and therefore the price is soon rising if it hasn’t already risen,” he said, noting that the Toyota Hiace, which are popular for public service vehicles, will be among the most affected.