URA officials and representatives of AEOs in a group photo
Uganda Revenue Authority (URA) has marked 10 years of the Authorized Economic Operator (AEO) program, a trade facilitation initiative derived from the World Customs Organization Safe Framework of Standards which URA’s Customs Department implemented in a bid to facilitate trade and promote security of the international trade supply chain.
It is a program for an individual, a business entity or a government department that is involved in international trade and is duly authorized by the Commissioner of Customs of the URA to operate as an AEO on fulfillment of requisite supply chain security requirements.
During a breakfast engagement held at Sheraton Hotel in Kampala on Wednesday to mark 10 years of AEO, Sarah Chelangat, the Ag. Commissioner General of the URA said “this journey gives us confidence that we are on track to mobilizing our revenue.”
According to Chelangat, URA boasts of 129 national AEOs which accounts for 40% of international trade operations amounting to about Shs 1.7 trillion and contributing about 4% of Customs revenue and 40% total revenue collection.
“We must all work and contribute towards this revenue journey. You are our strategic and exceptional partner. AEO has changed the game. The AEO program is more than a policy or regulation. We can achieve more if we trust you. That shows professionalism and integrity in doing our work. The AEO program has been a win-win for both of us,” Chelangat said.
She added: “It has allowed us to optimize our resources and focus on the high risk areas while providing faster and smoother clearing for low risk operators. It has led to efficiency, effectiveness and reduction in cost. Guard your AEO status and don’t drop it. We don’t like any dent on compliance. We don’t expect an AEO to be a candidate of agency notice for us to recover tax.”
Chelangat, who is URA’s Commissioner for Domestic Taxes, says over the last decade, URA has been working on the AEO program to make it more attractive for traders.
“Encourage your fellow traders to be part of this program…This year we are collecting 30 trillion. so, we are counting on you,” Chelangat appealed to AEOs.
Abel Kagumire, the Commissioner- Customs, revealed that over the years, the volume of taxes has grown from 4% in 2013 to 40% in 2023, a credit he tags to the AEO program.
“So, this gives us comfort and gives us time to concentrate on the 50% of those who are always in the red channel,” he said.
He added: “You have done well in areas of government goods, project cargo, raw materials for factories and industries, and these have 40% of our international trade component. We are still looking forward to seeing someone who imports consolidated cargo.”
James Malinzi, an Assistant Commissioner – Customs Audit at URA, says that a few errors encountered during “our M&E are really very minimal” and that it is important to note that “whenever we bring them out, you handle it without any hustling with you.”
“Continue checking yourself before we come to check on you so that our partnership can move on as was intended and as we want it to be,” he said.
Malinzi revealed that URA’s partnership with China to have AEOs get the same treatment abroad has seen 58 AEOs from Uganda trade with China since June 1, 2023.
He says the trade volume of AEOs with China has been worth Shs447 billion and Shs 84 billion has been collected in taxes.
“However, on the side of exports, we recorded nil volume which is worrying for a country which is looking at supporting and growing exports sector. So, as you import, also let us export Ugandan goods to China through this arrangement,” he said.
Betty Kiguli, the Procurement specialist of Mulwana Group commended URA for introducing the AEO program.
“This journey has had its challenges but more of successes and I hope these successes can continue,” Kiguli said, adding that the down time has has tremendously improved.
Being an AEO, Kiguli said that during the Covid-19 pandemic when Jesa, a subsidiary of Mulwana Group was bringing in machinery for company’s expansion, Mulwana Group benefited from tax exemption under the same arrangement.
“This has been a journey of success,” she said.
Anna Nambooze, the Country Director at TradeMark East Africa (who are the main sponsors of the AEO), pledged continued support towards the program.
“As TradeMark EA, our mandate is to do trade facilitation because we believe that through the economic empowerment of the private sector, we can then be able to work on poverty eradication. We hope to move from phase one of digitization system on to phase two, to be able to further increase digitization. This is the way to go. It helps us to streamline procedures and helps to work faster and have better efficiency,” Nambooze said.
