Overview:
Previously imported vehicles were given an official warehousing period of six months but with automatic extension of three months to make a total of nine months. Imported vehicles are warehoused in URA controlled custom bonded warehouses as importers get prepared to pay the due URA taxes.
Car importers are up in arms over the recent reduction of the warehousing period for vehicles from nine to six months by the Uganda Revenue Authority.
The taxman last week said that all motor vehicles of nine to 12 years shall not be warehoused beyond six months, a development that has since frustrated used car dealers.
Citing Section 47 of the amended 2004 East African Community Custom Management Act (EACCMA), Mr. Asadu Kisitu Kigozi the URA’s Assistant Commissioner for field services said they had already engaged dealers on the matter.
But several car importers, have since hit back at the taxman—saying that the adjustment in warehousing period for imported used cars has come a wrong time, when most businesses are struggling.
Marvin Ayebale, the spokesperson for Associated car Dealers -2015 was quoted by the New Vision as saying that “as the economy and general businesses are struggling to recover from the impact of COVID-19 the country and the whole whole world are going the challanges brought by Ukraine – Russia war and making such restrictions may frustrate business.”
“Such administrative measures might be good for revenue collection for national development but car import industry has been affected more due to poverty among Ugandans,” Ayebale was quoted as saying.
Previously imported vehicles were given an official warehousing period of six months but with automatic extension of three months to make a total of nine months.
The legal instrument banning the importation of old vehicles came into effect on July 1, 2018, following the amendment of the 1998 Traffic and Road Safety Act.
Imported vehicles are warehoused in URA controlled custom bonded warehouses as importers get prepared to pay the due URA taxes.
URA had also banned warehousing of vehicles of 13 years and above in that their taxes are paid while at the first ports of arrival for motor vehicles whose dates of manufacture are 2007 and 2008.
URA said no motor vehicle in the above category shall leave the ports without having paid taxes except special categories (such as vehicles on tax exemption) will be authorized by Commissioner Customs. All the above conditions only apply to vehicles that are in category of those affected by import age limits
Malik Azhar the former chairman for used Cars Dealers Association Uganda Ltd told reporters that URA should consider car importers when auctioning vehicles for continuity of business.
“No one would like to import vehicles and surrender them to public auction but is always financial constraints that brings about that.
Let owners of such vehicles be given special treatment when it comes to auctioning,” he explained.