All motorcycle owners to pay Shs50,000 in new tax
What you need to know:
- The levy, which is currently being scrutinised by the Finance Committee of Parliament, is among a number of new taxes from which government will be seeking to mobilise at least Shs200b in annual revenue.
All owners of motorcycles will be subjected to an annual tax of Shs50,000 beginning July.
The levy, which is currently being scrutinised by the Finance Committee of Parliament, is among a number of new taxes from which government will be seeking to mobilise at least Shs200b in annual revenue.
It is contained in the Traffic and Road Safety Act (Amendment) Bill Supplement, in which the Finance Ministry has provided for possession of a motor vehicle.
Motorcycles had not originally been captured in the new proposal, however, Ministry of Works permanent secretary Bageya Waiswa yesterday told Daily Monitor they are in the category of road users, noting they will also be subjected to an annual levy.
Details indicate that government will seek to at least raise Shs7b from the motor cycle license.
However, Parliament is expected to come out with the final figure after deliberating on the amendments.
Currently, motorcycle owners pay an annual Public Service Van (PSV) licence of Shs60,000 and Shs50, 000 for motor third party .
Uganda Revenue Authority (URA) annually clears more than 90,000 motorcycles into the country.
For instance, in the 2018/19 financial year, URA cleared 91,055 motorcycles before the figure went to 99,020 units in the 2019/20 financial year.
However, current trends indicate the figure will grow further at the end of this financial year, giving government an opportunity to increase revenue projections.
According to URA, at least 63,878 motor cycles have already been cleared to enter the country during the first and second quarter of the 2022/21 financial year.
The annual licence is also expected to form a basis from which government will seek to regulate the boda boda industry that remains largely unregulated.
Mr Bageya said the licensing will also help government to ascertain whether a motorcycle meets required standards.
“It is one way to regulate motorcycle or the boda boda industry because when we eventually start inspecting, it will be a requirement that before one gets a licence they have gone through an inspection process,” he said, noting government had started on a process in which it will ensure that SGS resume operations to conduct both inspection of motorcycles and motor vehicles.
SGS to conduct inspection
Licensing of motor vehicles and motor cycles will be conducted by SGS, according to Works Ministry.
SGS had earlier established a number of centres across the country in which it had been contracted by government to inspect motor vehicles for road worthiness.
However, its operations were halted by Parliament on claims that it was a duplication of functions done by pre-inspection of import verification and an unnecessary cost.
The centres, which are spread on the outskirts of Kampala on major highways, have capacity to inspect more than 200 motor vehicles a day.
Ministry of Works said Cabinet had already approved the decision for SGS to resume operations and an addendum to the previous contract will be conducted soon.
