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Used Cars to Get More Costly as Govt Moves to Crack the Whip on Importation

Government is set to roll out new regulations that will include among others banning importation of cars that are eight years old or more from the date of manufacture.

In 2017, the East African Community (EAC) Secretariat in collaboration with the Japan International Co-operation Agency (JICA) released a report, which indicated that on average, cars in the region are 15 to 20-years-old.

Armed with those figures, the report recommended cutting of the age limit for imported cars to five years by 2021, in an effort to promote local assembly in the region as well as curb the rate at which the ozone layer is being depleted.

According to a March 29 statement signed by Eng. Monica Azuba Ntege, the minister of Works and Transport — the new rules, which will be implemented under the Traffic and Road Safety Act, “shall come into force on 1st July, 2018.”

The statement indicates that motor vehicles which are “eight years old or more from the date of manufacture” will not be permitted for importation.

However, some vehicles have been excluded, and these include: road tractors for semitrailers, agricultural or forestry tractors, earth moving motor vehicles, tamping machines and motor vehicles for the transport of goods with a gross vehicle weight of at least six tonnes.

Special purpose motor vehicles like breakdown lorries, crane lorries, fire fighting vehicles, concrete mixer lorries, road sweeper lorries and spraying lorries among others will also not be affected by the Act.

According to Minister Ntege’s statement, if approved by parliament, the law also won’t affect “motor vehicles which are in transit before the commencement of this Act and which arrive in Uganda by 30th September, 2018.”

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Levies

The joint report by the EAC Secretariat and JICA showed that used-car imports make up about 85 per cent of the 2.2 million cars on the road in the region.

And, according to a 2017 Uganda Bureau of Statistics (UBoS) report, used cars comprise 80 per cent of the cars on the road in the country.

So, to “discourage people from buying used cars”, Susan Kataike, a spokesperson for the ministry of Works and Transport said they want to introduce environmental levies that will be charged during importation of vehicles that are five years old or more.

Uganda Revenue Authority will collect the payments.

According to the proposal, a motor vehicle which is five years old but which does not exceed eight years from the date of manufacture, will be charged 35% of the Cost, Insurance and Freight (CIF) value.  The costs will not be incurred by people buying goods vehicles.

CIF is the price invoiced or quoted by a seller, and it includes insurance and all other charges up to the named port of destination.

The ministry has also proposed that a motor vehicle which is eight years old or more from the date of manufacture which was imported or is in transit before the commencement of this Act, and which arrives in Uganda by 30th September, 2018 — pays 50% of the CIF value.

For an individual buying a motor vehicle which is five years old or more and principally designed to carry goods, that personal will cough 20% of the CIF value.

In the same Act, the Works Ministry has also suggested that there should be a variation in motor vehicle registration fees.

The Ministry wants Shs1,500,000 to be paid for one to a register motor vehicles such as Sedan cars, saloon cars and estate cars. The fee does not include dual purpose goods passenger vehicles.

The same fee will be imposed on a person registering passenger vehicles, including light omnibuses with a seating capacity not exceeding 28 passengers.

Medium omnibuses and heavy omnibuses with a seating capacity of more than 28 passengers will also pay Shs. 1,500,000 for registration.

Lastly, Shs 1,700,000 has been proposed as the price for registering Estate and station wagon vehicles with an engine capacity of 3500 cc or above.

For these proposals to work the relevant authorities will have to adjust in tactics, considering how porous the Ugandan borders are; cases of smuggled old cars leaving and entering the country still prevail.

Minister Monica Azuba Ntege said she would confirm to this website when The Traffic and Road Safety Act 1998 (Amendment) Bill, 2018 will be tabled before parliament but she had not gotten back to us at the time of publication.

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