Importers, URA clash over point of payment on duty

Cargo containers at at the Mombasa Port. Uganda importers of group cargo will be allowed to clear using their individual bill of landing upon arrival of goods in the internal container depot within 24 hours. PHOTO | KEVIN ODIT | NMG 

In Summary

• While the taxman wants it paid at port of entry, the importers prefer payments be made under the current system once the goods are in the country.
• Paying at port of entry means importers will not use the warehouse services, which allowed them time to store their goods as they looked for funds to clear their tax obligations.
• The new directive puts pressure on Uganda National Bureau of Standards to properly monitor imports

By HALIMA ABDALLAH
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Importers have clashed with the Uganda Revenue Authority over a recent proposal to amend payment of Customs duty.

While the taxman wants it paid at port of entry, the importers prefer payments be made under the current system once the goods are in the country.

“The commissioner Customs department informs all importers that effective immediately, all payments for home consumption declarations to Customs shall be valid for only 72 hours from the date of assessment as opposed to 21 days reflected on payment registration notices,” reads a notice signed by URA’s commissioner customs, Dickson C Kateshumbwa.

Besides that, there is an ultimatum for payment, while bond warehousing has been banned for sugar, milled and broken rice, wines and spirits except at duty free shops, building materials, motor vehicle tyres and tubes, motor cycle tyres, used motor vehicles that are 14 years old from the date of manufacture, dentifrices, garments and footwear.

“Customs clearance for these products shall be facilitated under the single customs territory where taxes shall be paid upon arrival at the first ports of entry into the EAC,” reads the notice.

However, importers of group cargo will be allowed to clear using their individual bill of landing upon arrival of goods in the internal container depot within 24 hours.

Mr Kateshumbwa said the idea is to harmonise the country’s Customs rules with those of the East African Community, guided by the EAC Customs Management Act 2004 and the EAC Customs management regulations 2010.

Paying at port of entry means importers will not use the warehouse services, which allowed them time to store their goods as they looked for funds to clear their tax obligations.

“People have already paid for warehouses and some do not have the cash to pay taxes, some have also invested in warehouses. Is URA killing warehouse businesses?” said Everest Kayondo Kampala City Traders Association chairman.

“The warehousing system is supposed to store goods when you do not have cash, but some people are using it to circumvent the single customs territory,” the notice reads.

The new directive puts pressure on Uganda National Bureau of Standards to properly monitor imports.