Revenue collection’s role in customs could be changing to trade facilitation. What does that mean to the future of customs?
This is a healthy trend. We need to rely more on domestic revenues rather than taxes from imports. Globally, the focus is on trade facilitation and border control. The days when URA would heavily rely on taxes collected from imports are slowly vanishing.
This financial year, we expect to collect about 36 per cent of the total revenue from customs. And we are going to do this from 23 per cent of dutiable imports. So, yes we have to facilitate trade because that has a direct bearing on our economy and revenue generation.
So as a country it is a healthy trend for us to be relying more and more on domestic taxes than on imported revenues. In developed economies like in Europe, customs contribute less than 2 per cent of the total revenues collected. And there is nothing wrong with that.
So with the evolution of the role of customs aren’t you bothered that it will worsen the country’s tax base?
Not at all. As more internal investments crops up and the economy continues to grow, there shouldn’t be any worry. Investments that are popping up now will sustain the future of Uganda by creating jobs. And once that happens many people will pay taxes. I am very comfortable about that and as a country we are on walking the path of Industrialisation. We are already manufacturing and exporting a few things. For example we are exporting 260 containers of tiles and we consuming about 40 per cent of that here. This is good news because it means that the money that we use to spend to go to China and India to import tiles remains here. This means so much.
We are seeing a shift from other markets in the region to Democratic Republic of Congo (DRC). From the revenue perspective, how much is being accrued from this new market?
In the last financial year we exported Shs390nillion worth of goods to DRC. And we could do more than this because this figure excludes the informal cross border trade.
So, DRC presents a big market for us. We have the longest border line with DRC and we are even able to reach Central African Republic, so our products can go there as well.
The issue now is for us to position ourselves to partake the regional markets and opportunities therein. Traditionally we exported to DRC beer, cement and soft drinks, we can still do more with agricultural products such as rice and sugar.
Steel is doing really well. In fact we want to encourage many exporters to go beyond the neighboring markets considering the fact that we are going into the implementation of the African Free Trade Continental Area (AFCTA).
Which items or sector of the economy generates most revenue at the customs?
Imported petroleum brings in a lot of money. Then dry cargo (motor vehicles) which also brings in massive amounts of revenue. We have others like wheat, clothing, footwear, cement clippers, cigarettes and lubricants.
Chinese products are all over the market. The Economic Partnership Agreement the Chinese government is trying to cut with Uganda means that the country will not have much to collect taxes from. What are your thoughts?
Uganda is increasingly becoming a competitive destination for investment. We have everything that factors of production deserves.
In addition to friendliness of the population and the good weather, there is nothing that we should be afraid of. We can compete favourably with any other products manufacturers, including China. Once infrastructure issues including power is sorted, then process our raw materials here, we shall be a force to reckon with.
For example, I don’t think our cotton is more expensive than any other cotton in the world. If we improve our yields and process our cotton, we shall be fine. So I don’t think it is a worrying future. If we make our things, here they will be cheaper than imported ones so the future should look much better than it is.
What is the customs revenue collection target for this financial year?
We are expected to collect about Shs7.6 trillion. This target has increased by over Shs700 billion. We will try to hit our targets as we also watch out for smugglers and those trying to beat our systems.
Currently, we can watch all our exports all the way up to the Eastern DRC. This has subdued the habit of round tripping. We also have cargo scanners at Malaba, Busia and Mukutula and we are installing many others at major border stations and the airport. In the last eight months, we recovered over Shs40 billion in taxes that would have been lost if we were not as vigilant and without some of the aforementioned systems.
Finally, how will Uganda and the region benefit from your recent appointment as chairperson of the Council of the World Custom Organisation?
Being the first African to assume that role means something. It is important in the sense that I am the first African to occupy that position in the 67 years of World Custom Organisation. I will be flying our flag in Brussels for the next two years.
I intend to represent Uganda, the EAC region and the continent at large with dedication and utmost efficiency. This position also says something about the confidence that URA has garnered across the globe over the years. The 183 member countries seems have noticed the reforms we have instituted. No wonder we get visitors and delegations virtually every month to learn a thing or two from us. So under my reign, I will ensure that as country we build bridges with other networks with a view of promoting our exports across various locations globally.
Customs revenue collection target . We are expected to collect about Shs7.6 trillion. This target has increased by over Shs700 billion. We will try to hit our targets as we also watch out for smugglers and those trying to beat our systems.
Impact of producing oil. Producing oil will be a game-changer for us in many ways. With our refinery, we shall refine our oil. This will cut down on the importation of petrol, diesel and kerosene.
Beyond that, we will also be producing oil byproducts. This will be a big opportunity to locally manufacture things that we now import.