Ugandan importers have accused Uganda Revenue Authority – URA of making it hard for them to trade after it said some goods, including footwear, motor vehicle tyres and garments of any kind would not be eligible for customs warehousing.
URA said in a notice last Friday that more ten goods would, effective October 20, 2019, shall not be eligible for customs warehousing.
The gazetted goods are: sugar, milled and broken rice, building materials, wines and spirits (except the duty free ones), motor vehicle tyres and tubes, motor cycle tyres and tubes, dentifrices, garments of all kinds and footwear of all kinds, and imported cars of 14 years and above.
The small importers who bring in goods in group containers will only have 24 hours to arrange themselves and clear goods in question.
The traders downtown Kampala said the tax body was making it impossible for them to do business.
Yiga Sseguya, who imports motor vehicle tyres which are now not eligible for warehousing, said it was unbearable that they bring in goods and clear taxes immediately to continue moving. If they can’t they have to pay for security that was previously guaranteed by URA’s customs warehouses.
These join other high-risk goods that are already not eligible for warehousing as per the East African Community Customs Management Regulations 2010: acids, ammunition for trade and business, arms for trade and business, chalk, explosives, fireworks, dried fish, perishable goods, combustible or inflammable goods except petroleum products for storage in approved places, and matches other than safety matches.
Several traders said the directive was basically chasing them away from importing.
Customs warehousing comes with several advantages. Traders have the opportunity to look for funds to clear their tax obligation at their convenience time by differing payment.
Also, they can acquire guaranteed security of their goods on which customs duty has not yet been paid.
Some can clear part of the goods, in case they don’t have funds to pay customs duty on all warehoused goods, and this allows for cash flow management. The other importance is that the importer has an opportunity to transfer goods to another party while they are still in the warehouse.
Lack of customs warehousing can put goods at risk of being stolen in case a trader cannot pay immediately and transport goods to the final destination.
Everest Kayondo, the Kampala traders’ association boss, said the process would be fast when URA does faster assessments and it can allow them to take goods and pay later.
Frank Musyobya, a garments importer said there are people who get problems with money when their goods are on the way and they find themselves with no money to clear them right away.
“Only the rich will stay in business but us who are just starting, it is impossible [to operate under these conditions].