Kampala- Used motor vehicle imports for the year ended 2019 declined by 12.8 per cent mainly due to a ban on cars older than 15 years.
According to data sourced from Uganda Revenue Authority, a total of 42,681 units worth Shs1.3 trillion were cleared into the country in 2019, which was a slight decline from the 48,966 units (Shs1.31 trillion) cleared in 2018.
The drop indicates that used vehicle imports in 2019 were less by 6,285 units, which saw government lose close to Shs6b.
Mr Dicksons Kateshumbwa, the commissioner for customs, admitted that the decline could been a result of a revision of the environment levy that effectively banned cars older than 15 years.
In June 2018, Parliament passed a law that banned importation of cars manufactured earlier than 2003.
The law, government said, sought to reduce toxic emissions that are associated with most used cars.
The law took effect on October 1, 2018 with a six grace period extension of up to March 2019 when dealers had to dispose of cars that were still in transit and bonds.
However, the ban has eaten into URA revenue collections with the tax agency realizing Shs388b in 2019 from used vehicles compared to Shs394b realised in 2018.
“The measure is not necessarily about tax but the environment; the future is important as well. Climate change is a concern globally, we have to minimise emissions,” Mr Kateshumbwa said, noting that progressively, there will be a reduction in old vehicles and motorcycles on the road.
“Also this action encourages industrialists to use better technologies with low carbon emissions,” he added.
Mr Francis Kanakulya, the Associated Car Dealers spokesperson, said a number of dealers also lost money given that many of them had continued to import vehicles older than 15 years even after the deadline extension.
“The challenge kept on building because many people didn’t know, so their vehicles were retained in Mombasa [port],” he said, adding a number of vehicles were auctioned by URA in the process.
The levy also forced an increase in prices and completion among some categories cars including Spacio and Premio, among others, which, according to Mr Kanakulya could have resulted in a drop of imported units.