Used cars in Coin bond opposite Crown Beverages Ltd along Jinja Road April 28, 2018.

NAKAWA – Dealers in used cars have protested Uganda Revenue Authority (URA) directive that all vehicles exceeding the fifteen years should be removed from all bonds.

In an October 28 letter to the used car dealers’ URA Commissioner for Customs Dickson Kateshumbwa said regardless whether taxes were paid or not for these vehicles, they would have to be taken to a private bond gazzatted by URA.

Mr Ronnie Rogers, a staff member of Al-Malik Group told Uganda Vanguard, ‘there is already an outcry over the demurrage charges in this private bond.’

Car dealers with cars of 15 years and above in their bonds have been given up to December 31, 2019, to sell them or they are confiscated as contraband.

Kateshumbwa also said bonds that stay with the cars will not be licensed to operate next year and those vehicles with taxes paid must not be parked in bonds.

Uganda announced a ban on the importation of cars that are 14 years and more effective October 2018 for environmental reasons. However, some dealers had hundreds of cars that were either on the way or already in the bonds. The cars were allowed to get in and traders were given a year to sell them.

However in a press briefing Friday November 15, 2019, car dealers have complained of the directive saying it is oppressive.

According to Francis Kannakulya, the spokesperson, Used Cars Dealers Association (UCDA), URA is going over its jurisdiction.

“We strongly feel after paying taxes to URA which is our mandatory obligation, the issue of us parking our vehicles in bonds should be personal business decision of bond owners and car dealers since we pay for parking of these vehicles,” he said.

Kanakulya further explained, “I think with due respect, the commissioner customs directive is unfair to us in the car dealership business. If there were any complaints from customer regarding the number plate issues, these complaints would be addressed to us.”

“When the law was passed, URA was part and parcel of the formulating this policy. Nothing was mentioned that they would go after vehicles imported into the country and in bonded warehouses. I feel that was the right time for URA to have pronounced themselves, as well regarding   vehicles already in the country,” Kanakulya noted.

Mr Malik Azar, former chairman, UCDA, called for dialogue with the tax body, insisting trade and manufacturing are pillars for government to raise revenue.

“URA should sit with all stakeholders and we get a proper understanding of these laws and therefore it must be applicable to all people uniformly. We have witnessed scenarios whereby after the ban of 15 years old vehicles, from date of manufacture still continue to enter the country. The ban is very unfair,” he added.

Azar said in 2014, when in the budget there was a 50 percent surcharge increment for all vehicles, dealers petitioned the commissioner of customs over the increment but he said his hands were tied. He further explained, “The commissioner said he could not do much because the law had been passed in the budget through parliament.We wonder then, why this directive issued to us car importers’ saying we must clear all our vehicles above 15 years that are in bonds by 31st December 2019 why it has not gone through parliament.”

He also urged URA to review its tax guidelines for used imported cars to decreasing value.

’’URA should in future consult all stakeholders if it is roll out these stringent directives that definitely affect business operations. The issue of basing on the manufacture month and year should be scraped and instead consider the year,’’ he added.

A year later, car dealers still have the cars aged 15years and more in their bonds. The new directive could see car prices dip a little bit so that dealers can meet the deadline. Traders will also expect the festive season to help them sell more cars.

 

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