Traders in stand-off with taxman over cars

Kampala City Traders Association (Kacita) has vowed to defy the directive of the Uganda Revenue Authority (URA) that requires importers of motor vehicles of nine years and above from the date of manufacture to clear taxes upon arrival at the ports of entry with effect from July 1.

Addressing a news conference in Kampala yesterday, the chairperson of Kacita, Mr Thadeus Nagenda Musoke, said the new arrangement is not only expensive but also risky for traders.

“From the research and consultations that we have made, we stand to oppose the notice and, therefore, ask for immediate withdrawal of the directive as we focus our efforts on engaging the affected parties and the entire public. The business community usually depends on borrowed money where banks have to verify vehicles before extending the facility,” Mr Musoke said.

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In an April 1 public notice, URA stated that the clearance of such vehicles shall be facilitated under the Single Customs Territory (SCT) arrangement where taxes will be paid upon arrival at the port of entry in Mombasa and Dar es Salaam.

The statement says this is pursuant to Section 64(K) of the East African Customs Management Regulations, 2010, and Section 14B of the Traffic and Road Safety (Amendment) Act, 2018.

“… effective July 1, 2022, motor vehicles of nine years or more from the date of manufacture shall no longer be cleared under the warehousing regime …,” the notice reads in part.

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However, Mr Musoke said the Customs Act provides for 270 days (nine months) as the warehousing period of any goods imported into the country to which traders have been complying.

The traders are also concerned about the security of vehicles, saying a number of them have been stolen in transit even before the final clearance is done, and that the situation may worsen since URA’s intervention will now stop at the port of entry.

The publicity secretary for the Associated Motor Dealers Association, Mr Marvin Ayebale, said the new directive will increase the cost of doing business, which may result in increase in prices.

“We need to appreciate that about 95 percent of Ugandans buy these vehicles in instalments while others can’t afford to buy bonded vehicles. This has been possible through the warehousing regime, which allows vehicle importers to warehouse them up to 270 days. A Premio, which has been costing about Shs40 million, may now cost Shs 50 million,” Mr Ayebale said.

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The Kacita spokesperson, Mr Issa Ssekito, said they had received several petitions from traders and forwarded them to concerned ministries to take action.

Mr Ssekito said if the new directive is effected, more than 3,000 people in the sector, majority of whom are casual labourers, will be rendered jobless.