3 months grace period given for imported old cars

October 2, 2018 in Business, Policy, Transport by Editor

October 2, 2018—Uganda Revenue Authority (URA) has allowed a three month grace period for people to finalize tax payment for imported vehicles older than 15 years old that are now banned, but this only applies to vehicles already in Uganda or East Africa as of September 30.

URA Commissioner of Customs, Dicksons Kateshumbwa said on Monday, “Vehicles already in Uganda/East Africa by September 30 will be allowed up to a period of three months to pay taxes and register their motor vehicles.”

Previously URA had announced that no motor vehicle aged 15 years and older would be allowed into Uganda effective October 1, 2018.

On average, Uganda imports about 4,000 cars per month, majority of which are older than 10 years. Malik Azhar, a founder member of the Used Car Dealers Association, was recently quoted as saying the new law would “put vehicle ownership beyond the reach of many Ugandans and will have a great effect on revenue collections.”

However,  supporters of the ban say used cars are prone to accidents, pollute the environment and cause respiratory illnesses.

Earlier this year, Parliament passed the Traffic and Road Safety Act 2018 which provided that ‘a person shall not import a motor vehicle which is 15 years old or more from the date of manufacture’.

The same law creates various exceptions including motor vehicles which are in transit before the commencement of the Act July, 1, 2018 and which arrive in Uganda by September 30, 2018. It is understood car deals met with URA officials last week during which it was discovered that an estimated total of 5,000 cars remained in the bonded warehouses and in transit as at September 28.

Kateshumbwa said, “Duty-paid motor vehicles that are still within the warehousing period will be relocated to a designated place within the bonded warehouse pending registration.”