Older cars face surcharge
Sep 02, 2003
AN initial 10% surcharge is to be levied on the cost of all small secondhand vehicles older than five years. This is effective next financial year and is aimed at reducing traffic jams, air pollution, product dumping and national fuel consumption.
By Cyprian Musoke
AN initial 10% surcharge is to be levied on the cost of all small secondhand vehicles older than five years. This is effective next financial year and is aimed at reducing traffic jams, air pollution, product dumping and national fuel consumption.
It has long been accepted that secondhand vehicles are less efficient in fuel consumption than brand new models.
According to the draft Finance Bill 2003/04 and seen by The New Vision, the move, is to be implemented together with a proportionate reduction in the duty on new cars.
Sources say this will eventually help phase out imports of secondhand vehicles by financially penalising those who buy them.
“This position was reached after a very long debate with the Finance Minister. There were two options. In other countries they have totally banned old vehicles. So instead of banning them, we opted for a surcharge, as a way of encouraging new vehicles,†Bright Rwamirama, the chairman of parliament’s finance committee said.
The MPs who scrutinised the Bill on Monday, blamed small cars for road congestion. Mostly because these cars often carried one person, compared to the use of omni-buses and bigger passenger vehicles, which the Government wants to encourage.
The committee agreed that omni-buses with a capacity of over 28 people, and heavy-duty commercial vehicles should be exempted. The committee agreed that these vehicles were expensive but vital for development.
The 10% surcharge will be levied on estate cars, saloon cars, station wagons including most four-wheel drive vehicles and commuter taxis.
The idea to single out four-wheel vehicles was reached after Rogers Matte (Ntoroko), raised a concern that MPs will be accused of having left out their type of cars.
However, Kabula MP James Kakooza was not amused by the idea of the levy without giving adequate notice.
“You cannot tax all the cars in the warehouses! People have already imported their stocks of cars. They should have been given notice,†he said.
He also suggested more reductions in import duty for new cars.
Rwamirama however took exception to him, saying that it was good policy, as second hand vehicles are often a raw deal.
“You buy a vehicle today, tomorrow you are overhauling the whole engine. They should go,†he said.
AN initial 10% surcharge is to be levied on the cost of all small secondhand vehicles older than five years. This is effective next financial year and is aimed at reducing traffic jams, air pollution, product dumping and national fuel consumption.
It has long been accepted that secondhand vehicles are less efficient in fuel consumption than brand new models.
According to the draft Finance Bill 2003/04 and seen by The New Vision, the move, is to be implemented together with a proportionate reduction in the duty on new cars.
Sources say this will eventually help phase out imports of secondhand vehicles by financially penalising those who buy them.
“This position was reached after a very long debate with the Finance Minister. There were two options. In other countries they have totally banned old vehicles. So instead of banning them, we opted for a surcharge, as a way of encouraging new vehicles,†Bright Rwamirama, the chairman of parliament’s finance committee said.
The MPs who scrutinised the Bill on Monday, blamed small cars for road congestion. Mostly because these cars often carried one person, compared to the use of omni-buses and bigger passenger vehicles, which the Government wants to encourage.
The committee agreed that omni-buses with a capacity of over 28 people, and heavy-duty commercial vehicles should be exempted. The committee agreed that these vehicles were expensive but vital for development.
The 10% surcharge will be levied on estate cars, saloon cars, station wagons including most four-wheel drive vehicles and commuter taxis.
The idea to single out four-wheel vehicles was reached after Rogers Matte (Ntoroko), raised a concern that MPs will be accused of having left out their type of cars.
However, Kabula MP James Kakooza was not amused by the idea of the levy without giving adequate notice.
“You cannot tax all the cars in the warehouses! People have already imported their stocks of cars. They should have been given notice,†he said.
He also suggested more reductions in import duty for new cars.
Rwamirama however took exception to him, saying that it was good policy, as second hand vehicles are often a raw deal.
“You buy a vehicle today, tomorrow you are overhauling the whole engine. They should go,†he said.