URA pilots new customs union tax system in Jinja
Aug 22, 2013
The Uganda Revenue Authourity (URA) will use Jinja district to run a month long test of a system that links the Kenyan, Ugandan and Rwandan tax authorities as the East African customs union shapes up.
By Samuel Sanya
The Uganda Revenue Authourity (URA) will use Jinja district to run a month long test of a system that links the Kenyan, Ugandan and Rwandan tax authorities as the East African customs union shapes up.
Uganda uses the Asycuda World computer system, Kenya uses the Simba computer system and Rwanda uses the Kwatos system for customs tax administration.
“We want to test connectivity of the three systems and related processes for a month. If everything works well, the system will be launched on September 15,” said Sarah Mwesigye, the URA assistant commissioner customs field services.
She made the comments at the sidelines of a multi stakeholder engagement between the URA and the private sector recently.
The meeting had participation from the Ugandan Manufacturers Association, Kampala City Traders Association, the Private Sector Foundation Uganda, Uganda Freight Forwarders Association and the Uganda Clearing Industry and Forwarding Association.
The URA will bulk imports and exports of goods by Nyanza Nytil and edible oil company Bidco in Jinja district to test the compatibility between the tax systems of the three countries.
Cargo manifests will be sent to the Kenya tax authority before vessels arrive at the port of Mombasa with tax rates being determined in Uganda.
Importers in Uganda will now be able to clear goods from Mombasa, reducing cargo transit days and related costs.
Hitherto, Kenyan clearing firms had a monopoly over clearing cargo from the port of Mombasa, with Ugandan agents clearing the same cargo from Malaba into Uganda.
This made it expensive to import cargo due to handling fees, several insurance bonds and delays along the way due to several weighbridges.
The weighbridges have been reduced to two from five.
Trucks carrying cargo into Uganda are required to deposit a minimum insurance bond of $300 (sh780,000) per container.
A separate insurance policy is needed to store cargo in bonded warehouses.
Uganda has approximately 120 bonded warehouses handling general cargo, cars and manufactured goods.
URA’s Dickson Kateshumba noted that it will be possible for importers with bonded warehouses to use a simple insurance bond to import and store cargo, making it cheaper to do business in Uganda.
“Importers will now use a single insurance bond to transport cargo from Mombasa to Kampala. The same bond can be used from Dar es Salaam to Kampala,” said URA’s Stephen Magera.
“The only gap remaining is between Malaba and Mutukula. We are consulting widely to improve the system,” he added.
The changes will give Ugandans increased control in the importation of goods and bolster Uganda’s insurance industry.