Uganda Revenue Authority (URA) has reviewed restrictions imposed on the importation and warehousing of old cars in the country.

According to the URA Commissioner General, John Rujoki Musinguzi, the move to review the warehousing restrictions on old motor vehicles has been occasioned by the current global economic trends and inflation.

“Considering the current global economic, geo-political trends that caused creeping inflation in Uganda, URA has adopted a more gradual but progressive approach to the restriction of warehousing of used motor vehicles,” Musinguzi said during a meeting with leaders of used motor vehicle importers and car dealers.

The new measure, URA officials said, will take effect on July 1, 2022.

The car dealers and importers under their organization, Used Car Dealers Association of Uganda, had petitioned URA on May 5, 2022, challenging a notice issued by the Commissioner General on April 1, 2022, directing all importers of cars dating nine years old or more to undergo customs clearance and pay taxes at the port of entry into the East African Community before such vehicles are allowed into Uganda.

The old car importers and dealers argued that the directive will directly impact re-export business and throw them out of business.

In their petition, used car dealers were concerned about the directive’s impact on the re-export business.

However, the URA boss has relaxed the restriction on the warehousing period of motor vehicles aged nine to 12 years.

Under the new rules on the warehousing regime, motor vehicles older than 13 years shall pay taxes while at the first ports of entry into EAC.

Old car importers and dealers argued in their petition that the earlier strict warehousing rules imposed by URA, if not relaxed, will affect the re-exportation business of 5,000 vehicles that are re-exported to South Sudan, Democratic Republic of Congo and Burundi. 

Marvin Ayebale, the association spokesperson, said 83% of the re-exported motor vehicles fall in the 9-12 year category that URA’s restrictions were targeting. 

Ayebale added that if the URA directive is adopted, close to sh120b would be lost since vehicles intended for re-export would have to be cleared at the ports again.