Business

Revenue, Jobs to Be Lost over New Law on Used Vehicles – Dealers

Importers of used cars have warned that Uganda Revenue Authority is at risk of losing revenue over the proposed law to stop importation of cars eight years and above from date of manufacture.

They have also warned that many Ugandans who are employed in the sector are at risk of losing jobs and have urged legislators to reject the proposal.

Currently, Uganda imports over two thousand used cars annually, which generates over billions of shillings in Taxes to URA.

Speaking in a meeting attended by second-hand car importers in Kampala, Marvin Ayebale, the secretary general of association of motor dealers in Uganda said that any proposal to this effect should be done in fazes so as to allow Ugandans to adjust accordingly.

He added that at the moment many Ugandans cannot afford new cars because they are expensive.

“We are not against the Government proposal of banning the importation of second-hand cars but more time should be given to the dealers since some have made orders for the vehicles from Japan and other countries. If the Government implements the proposal, car dealers will be affected,” he explained.

Government under the new Traffic and Road Safety Act 1998 (Amendment) Bill, 2018 tabled before parliament, proposes that a person who imports a motor vehicle which is five years old or more from the date of manufacture shall pay an environmental levy on that vehicle.

The environmental levy shall be collected by the Uganda Revenue Authority before clearance of the vehicle.

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However under the same proposal, some vehicles of special usage are exempted from the ban and they are breakdown Lorries, crane Lorries, fire fighting vehicles, concrete mixer Lorries, road sweeper lorries, spraying lorries, mobile workshops, forklifts, mobile drilling rigs and mobile radiological units.

In addition to those Motor vehicles which are in transit before the commencement of this Act and which arrive in Uganda by September 30, 2018 will also be exempted from the ban.

The estimated average transaction price of a new car is about Shs65 million compared to the used ones that cost between Shs10 million and Shs20 million.

The contentious Bill signed by Works and Transport minister Monica Azuba Ntege also proposes revisions on car registration fees and the environmental levy imposed on imported cars.

 

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