URA eases storage restrictions on old motor vehicles
The Uganda Revenue Authority (URA) has revised its previous directive to remove motor vehicles nine years or older from the storage regime to adopt a one-year reduction approach.
With the new measure, which comes into force on July 1, motor vehicles over 13 years old will have to pay taxes at the first ports of entry into the East African Community (EAC).
This was revealed by URA Commissioner General John Rujoki Musinguzi on Friday during an interview with used car dealers at the Authority’s headquarters in Nakawa.
Musinguzi also decided to reduce the storage period for motor vehicles aged 9 to 12 years, to just six months without an extension.
Current practice allows an importer to store these vehicles for up to nine months.
“Given the current economic landscape and the geopolitics that have caused rampant inflation in the country, it is imperative that the URA take a more progressive yet step-by-step approach to restricting the storage of used motor vehicles” , said Mr. Musinguzi.
In a notice issued on April 1, 2022, the Revenue Authority ordered all importers of cars nine years old or older to undergo customs clearance and pay taxes at the port of entry into the EAC before these vehicles are allowed in Uganda.
This was to come into force on July 1, 2022 for non-utility passenger motor vehicles. Therefore, on May 5, 2022, the importers, under their umbrella, Used Car Dealers Association of Uganda, petitioned the Commissioner General of the URA expressing their dissatisfaction with the directive. .
In the petition, used car dealers were concerned about the impact of the directive on re-export business. They noted that 5,000 vehicles are re-exported to South Sudan, the Democratic Republic of Congo and Burundi.
Marvin Ayebale, the association’s spokesman, said 83% of re-exported motor vehicles are in the nine to 15 year old category.
He added that if the URA directive is passed, nearly 120 billion shillings are at risk as vehicles destined for re-export would have to be cleared at ports.
The URA’s original guideline on motor vehicles nine years or older was intended to prevent revenue loss from storing motor vehicles for up to nine months.