URA Relaxes Warehousing Restrictions on Old Motor Vehicles
The Uganda Revenue Authority (URA) has reviewed its earlier directive to remove motor vehicles dating nine years old or more from the warehousing regime to adopting a one-year reduction approach on warehousing regime for these motor vehicles. With the new measure, which takes effect on 1st July 2022, motor vehicles older than 13 years shall pay taxes while at the first ports of entry into the East African Community (EAC).
URA’s Commissioner General John Rujoki Musinguzi, said this last Friday during an engagement with used car dealers at the authority’s headquarters in Nakawa. Mr. Musinguzi also resolved to reduce the warehousing period of motor vehicles aged nine to 12yrs, to only six months without extension.
The current practice allows an importer to warehouse such vehicles up to nine months. He further told the car dealers, that URA recognised the effect of the current global inflation, which is still affecting businesses in all sectors, the approach to adopt changes in the warehousing regime ought to be reviewed. “Considering the current economic landscape and the geo-politics that has caused creeping inflation in the country, it is imperative that URA adopts a more gradual but progressive approach to the restriction of warehousing of used Motor Vehicles,” Mr. Musinguzi said.
In a notice issued on 1st April, 2022, the tax authority directed all importers of cars dating nine years old or more to undergo Customs clearance and pay taxes at the port of entry into the EAC before such vehicles are allowed into Uganda. This was to take effect on 1st July, 2022 for private motor vehicles excluding commercial ones. Consequently, on 5th May, 2022, the importers, under their umbrella body, Used Car Dealers Association of Uganda, petitioned the URA Commissioner General expressing dissatisfaction with the directive.