Traders protest over URA new directives

TAXES     IMPORTS

KAMPALA - Kampala City Traders (KACITA) on Monday protested the implementation of the new directive requiring them to start paying import taxes at first port of entry into the East African community.

During a heated meeting with URA officials, the traders also protested URA's directive to clear their goods within 24 hours after arrival in Mombasa or Dar- es -Salam, saying this does not allow them enough time to get money to clear the taxes.

"Most of us borrow money from banks and money lenders who sometimes take longer to process the money. This means that by the time the loan is approved, the trader may have already lost their goods, or required to pay heavy fines," Everest Kayondo KACITA chairman said.

 He further said that traders are concerned because most of their goods, especially from China, are usually ordered on credit, and cleared a few days after they reach Mombasa.

Kayondo said it will be impossible for traders to purchase goods in the new arrangement which will force many of them to close their businesses.

The Chinese ask for money before they give us clearing documents and yet we have to clear taxes within 24 hours, which makes it impossible for the business to survive in this kind of system.  

The Kenyan government has threatened to suspend any clearing firm that revokes the set time and now the Kenyans are threatening to avoid Ugandans if we do not show proof of tax clearance fees," he said.

Last month, the taxman issued a public notice to traders indicating that clearance of sugar, millet and broken rice, wines and spirits, building materials and motor vehicles of 14 years from the date of the manufacturer would be cleared under the Single Customs territory arrangement where the taxes are paid at the port of entry.

Other products affected by the notice, which came into force on October 20, 2019, include dentifrices, garments of all kinds and footwear of all kinds. 

According to URA, the move was part of the rollout implementation of the East Africa Single Customs Territory, which is meant to facilitate the ease of doing business across the region.

President of Federation of Uganda customs agents and freights forwarders Tom Byarugaba said if traders are paying their taxes at the first port of entry then customs agents would be left with no jobs in Uganda.

‘'This new issue is going to leave many people jobless hence increasing the unemployment problem in the country" Byarugaba said.

The Uganda transporters' association's Sulaiman Matovu said they are likely to make losses from traders' delays at the port since the vehicles are charged $200 for every day spent.

Issa Ssekitto the public relations officer of KACITA protested the taxman's directive to financial institutions, requiring a tax clearance on the transfer of money exceeding sh50m out of the country.

According to URA, businesses or corporate companies had to present a tax compliance certificate to financial institutions or forex bureaus before they can transfer money exceeding sh50m outside the borders of Uganda. 

Vicent Seruma URA'S Public relations officer said the directive has been withdrawn by the commissioner general until further notice.

Seruma said they will first internalize the traders' queries before meeting them again after ten days.