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Govt scraps used car inspection charges

By Vision Reporter

Added 27th September 2010 03:00 AM

THE government has halted the pre-shipment road worthiness inspection scheme on imported used cars initiated by the Uganda National Bureau of Standards (UNBS).

THE government has halted the pre-shipment road worthiness inspection scheme on imported used cars initiated by the Uganda National Bureau of Standards (UNBS).

By Alex Balimwikungu

THE government has halted the pre-shipment road worthiness inspection scheme on imported used cars initiated by the Uganda National Bureau of Standards (UNBS).

The suspension, which takes immediate effect, comes in the wake of a directive from the finance minister Syda Bumba to the Uganda Revenue Authority chief and UNBS management.

“It is great news that the Government has finally done away with the archaic and antagonistic policy.

“We applaud the Government. The law was greatly undermining our competitiveness in the East African Community contrary to the Government’s vision of building a competitive Ugandan private sector,” Nelson Tugume, the National Chairman of Uganda Motor Vehicle Importers and Dealers Association, told reporters on Friday.

Tugume said they were subjected to the highest cost paid anywhere in the world for a road worthiness certificate of a used car.

He said importers paid over $390 (over sh800,000) as inspection fee per car, including $150 to transport it to the inspection venue compared to $25 charged by Tanzania for the same service.

“The abnormal high cost of inspection has discouraged us from trading in used cars and URA is feeling the pinch in form of reduced revenue.

“For instance, we were paying up to $90m per year in taxes on used vehicles but since the scheme was introduced, monthly collections on imports of used cars reduced to less than $4m per,” he noted.

He explained that by inspecting vehicles in Japan, UNBS was denying about 200 skilled Ugandans access to direct jobs that would be created by having the internal inspection points within Uganda.

He said with the new developments, the price of used imported cars would reduce.

“For the 5,000 units (cars) that we import every month at the rate of $295 each, we were giving away $1.475m per month or $17.7m per year to a Japanese private firm.

“Such massive and unnecessary outflows are a threat to our impressive macro-economic management that made Uganda the only country in the East African region not to run to the International Monetary Fund for funding during the global economic meltdown,” Tugume argued.

Govt scraps used car inspection charges

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