Why do Ugandans buy older vehicles?
Nov 07, 2009
I would like to comment on the issue of pre-shipment inspection scheme for used motor vehicles about to be implemented by Uganda National Bureau of Standards (UNBS).
By George Kaahwa
I would like to comment on the issue of pre-shipment inspection scheme for used motor vehicles about to be implemented by Uganda National Bureau of Standards (UNBS).
To a large extent I do not agree with the UNBS boss, Dr Terry Kahuma when he argues that the scheme will reduce the importation of vehicles in poor and dangerous mechanical condition.
Rather than involve yet a third party to collect money from the importers in the name of inspection, UNBS should first have tried to establish why Ugandans buy older and cheaper models compared to the rest of the other East African counterparts.
The tax regime for used cars in Uganda is so prohibitive that though many Ugandans can afford newer models, they are deterred by the tax component. This is especially so when there is this animal called the customs Guide Price which in most cases is higher than the actual invoice price. For example a Toyota Premio model 2001 costs $5,000 FOB. The taxes levied on it may be almost the cost of the vehicle or more!
Rather than introduce yet another ‘revenue’ collector this time at the point of purchase, why not set the age of the oldest model of vehicle to be permitted to enter Uganda and start a fight with URA (Parliament?) and the National Bureau Of Standards who seem to be on opposite sides of the subject as the former is interested in revenue and the latter on sound vehicles. An old car is an old car and inspecting it is just cosmetic.
The inspector, apart from being too busy to scrutinise every car in detail may not be immune to manipulation. In my opinion setting a threshold of the age of vehicles to be imported is a better option and is actually fool-proof as the software that identifies the year and month when a particular vehicle was released from the factory is now available in the country and not only with the dealers but also with other institutions like the URA.
If the URA can identify the exact year of manufacture when the chassis details are entered in the computer for purposes of taxation they can also do the same to control entry of junk cars in the country.
Most important taxes ought to be revised to favour whoever imports a newer vehicle. Old Vehicles have become synonymous with Ugandans! On my recent visit to a Dubai used car show room, I was refused to inspect a Toyota Hiace Model 2004 when the seller was told I was a Ugandan!
No amount of pleading from the broker yielded anything as the seller insisted those cars were stocked for Kenyans and Tanzanians! I was shown vehicles manufactured earlier than 1999 and was advised that that was what Ugandans could afford. But is it really true that we cannot afford $9,500 for a model 2004? My answer is no. It is the difference between the taxes for a 1998 and 2004 that determines what we import.
The fact that these vans transport more Ugandans than the common “my cars†to warrant a fairer tax is sacrificed at the altar of URA’s tax targets. Kahuma argues that this inspection will check dubiously acquired vehicles from entering Uganda. This too may not hold as the cars in the show rooms may pass through two or more countries.
In this case a vehicle will be identified by the last registration from the last country of origin. I wonder if the inspector will refuse to pass a car with an authentic a log book from Singapore when the country of manufacture is Japan. Besides, this service/duty this falls under the docket of Interpol whose services one does not require to pay for.
As for the Odometer readings still the inspector cannot do much, there is already available software that rewinds the mileage electronically and it may not be possible to detect the change.
UNBS being a standard-based organisation should stick to the known and infallible standard (read year of manufacture and not the inspectors) as even our neighbours quoted to be applying the same method have a threshold on the age of the cars imported in their countries.
My concern for the scheme is far from whether it was advertised and discussed, in line with the PPDA, stakeholders etc, but rather its practicability in the Ugandan circumstances.
UTODA, Kasiita, the Ministry of Works, seem to have unanimously agreed that delivery vans specifically manufactured to carry grocery, flowers and clothes from farms and drycleaners in Japan are “licensed to carry 14 passengers†in Uganda.
This decision was not after ‘research’ in Bwaise and Ndeeba had yielded evidence that seats can be fabricated and fitted for the comfort of all Ugandans. This still goes on even when the authentic passenger carrier, the Super Custom is available in the country as an example but in Japan is licensed to carry seven to nine passengers!
The writer is the proprietor of
Eagle Motors, Kampala
Nagenda will be back next week
I would like to comment on the issue of pre-shipment inspection scheme for used motor vehicles about to be implemented by Uganda National Bureau of Standards (UNBS).
To a large extent I do not agree with the UNBS boss, Dr Terry Kahuma when he argues that the scheme will reduce the importation of vehicles in poor and dangerous mechanical condition.
Rather than involve yet a third party to collect money from the importers in the name of inspection, UNBS should first have tried to establish why Ugandans buy older and cheaper models compared to the rest of the other East African counterparts.
The tax regime for used cars in Uganda is so prohibitive that though many Ugandans can afford newer models, they are deterred by the tax component. This is especially so when there is this animal called the customs Guide Price which in most cases is higher than the actual invoice price. For example a Toyota Premio model 2001 costs $5,000 FOB. The taxes levied on it may be almost the cost of the vehicle or more!
Rather than introduce yet another ‘revenue’ collector this time at the point of purchase, why not set the age of the oldest model of vehicle to be permitted to enter Uganda and start a fight with URA (Parliament?) and the National Bureau Of Standards who seem to be on opposite sides of the subject as the former is interested in revenue and the latter on sound vehicles. An old car is an old car and inspecting it is just cosmetic.
The inspector, apart from being too busy to scrutinise every car in detail may not be immune to manipulation. In my opinion setting a threshold of the age of vehicles to be imported is a better option and is actually fool-proof as the software that identifies the year and month when a particular vehicle was released from the factory is now available in the country and not only with the dealers but also with other institutions like the URA.
If the URA can identify the exact year of manufacture when the chassis details are entered in the computer for purposes of taxation they can also do the same to control entry of junk cars in the country.
Most important taxes ought to be revised to favour whoever imports a newer vehicle. Old Vehicles have become synonymous with Ugandans! On my recent visit to a Dubai used car show room, I was refused to inspect a Toyota Hiace Model 2004 when the seller was told I was a Ugandan!
No amount of pleading from the broker yielded anything as the seller insisted those cars were stocked for Kenyans and Tanzanians! I was shown vehicles manufactured earlier than 1999 and was advised that that was what Ugandans could afford. But is it really true that we cannot afford $9,500 for a model 2004? My answer is no. It is the difference between the taxes for a 1998 and 2004 that determines what we import.
The fact that these vans transport more Ugandans than the common “my cars†to warrant a fairer tax is sacrificed at the altar of URA’s tax targets. Kahuma argues that this inspection will check dubiously acquired vehicles from entering Uganda. This too may not hold as the cars in the show rooms may pass through two or more countries.
In this case a vehicle will be identified by the last registration from the last country of origin. I wonder if the inspector will refuse to pass a car with an authentic a log book from Singapore when the country of manufacture is Japan. Besides, this service/duty this falls under the docket of Interpol whose services one does not require to pay for.
As for the Odometer readings still the inspector cannot do much, there is already available software that rewinds the mileage electronically and it may not be possible to detect the change.
UNBS being a standard-based organisation should stick to the known and infallible standard (read year of manufacture and not the inspectors) as even our neighbours quoted to be applying the same method have a threshold on the age of the cars imported in their countries.
My concern for the scheme is far from whether it was advertised and discussed, in line with the PPDA, stakeholders etc, but rather its practicability in the Ugandan circumstances.
UTODA, Kasiita, the Ministry of Works, seem to have unanimously agreed that delivery vans specifically manufactured to carry grocery, flowers and clothes from farms and drycleaners in Japan are “licensed to carry 14 passengers†in Uganda.
This decision was not after ‘research’ in Bwaise and Ndeeba had yielded evidence that seats can be fabricated and fitted for the comfort of all Ugandans. This still goes on even when the authentic passenger carrier, the Super Custom is available in the country as an example but in Japan is licensed to carry seven to nine passengers!
The writer is the proprietor of
Eagle Motors, Kampala
Nagenda will be back next week