Business
Used car importers protest PVoC fees
Publish Date: Mar 25, 2014
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By Eddie Ssejjoba and Samuel Sanya

USED car importers have closed their businesses and locked their offices protesting against sections of the Pre-Export Verification of Conformity to Standards (PVoC) program by the Uganda National Bureau of Standards (UNBS).

Under the PVoC scheme that came into effect late last year, imported used motor vehicles are supposed to be tested by any of the three contracted quality assessment firms. 

UNBS contracted the services of Japan East Africa Automobile, a Japanese firm, Jabal Kilimanjaro based in the United Arab Emirates and Javic to test the road worthiness of cars imported in Uganda.

There was tension on Monday at almost all car depots within the Kyambogo closed business and offices and rejected buyers, condemning UNBS for what they referred to as ‘unfair’ fees.

One of the car importers, Amrit Pal Singh, the director Ajit Motors Limited, a member of the Used Car Association of Uganda (UACU) said that they (car importers) were paying at least $140 on inspection fees in Japan for each vehicle and as much as 15% of the total cost of the car, insurance and freight with UNBS inspectors. 

But these costs, according to Singh, go to the customers and ‘the benefits go to foreigners and is not benefiting the Ugandan economy’. He argues that the second inspection should be done within Uganda and not abroad.   

He pointed out that the car importers are remitting as much as $26m (sh65b) each year to the three firms subcontracted by UNBS, adding that the inspection fees increase car prices by a minimum of sh1.8m.

Singh however stressed that importers were not against the entire PVoC scheme, but would prefer that the second inspection be done when the cars arrive in Uganda so that money spent can benefit the Ugandan economy. 

The traders demand dialogue with the trade and industry minister, Amelia Kyambadde to iron out the issues, saying about 125 cars are sold in the bonds daily, the shutdown would therefore affect tax collections by the Uganda Revenue Authority.

Other importers say used cars are at times more roadworthy than the first hand cars.

Imran Yunus, the director Future Group Limited that used cars are tested before they leave Japan and are driven for thousands of miles from the Kenyan Port of Mombasa to Kampala, and almost half of these cars are resold to neighbouring countries, bringing in a lot of foreign exchange.

“No additional tests are required for the cars we re-export, so we should not be paying these fees in the first place,” he said. 

Abdul Rahman of Africa-Japan Motors said the second inspection fee should be scrapped, asking UNBS to consider doing road worthiness tests for the cars already on Ugandan roads as they are an even greater danger.

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