Car importers seek waiver on charges

By John Odyek

UGANDA vehicle importers have petitioned the Kenya government to give them a 100% waiver on demurrage charges for vehicles that have been held at Mombasa Port since 2005. 

The traders estimate that there are over 800 used vehicles estimated at over $3m (sh7.4b).

“The demurrage charges now exceed the cost of the vehicles by more than 10 times. No business person can afford those charges,” Ahmed Balyejjusa, a member of Kampala City Traders Association, said.

Uganda Revenue Authority (URA) officials have blamed the owners of the vehicles for not paying taxes on the vehicles in Uganda as a condition set by the Kenya Revenue Authority (KRA) for the vehicles to be released from the port.

Richard Kamajugo, the commissioner for customs Uganda Revenue Authority, said Kenya Revenue Authority is afraid that many Ugandan car importers sell second hand cars in the Kenya market. Kenya restricts the importation of vehicles made in 2005 and below.

Kamajugo said KRA wants owners of the vehicles to pay for their taxes in Uganda and they would give a waiver on all ware house rent.

“We are willing to write letters to KRA for those who pay taxes on the vehicles. The letter will give KRA assurance that the vehicles will not be diverted into the Kenyan market. Kenya has put some restrictions on the importation of vehicles eight years and older,” Kamajugo said.

He added that KRA can auction off goods if they are unclaimed or not paid for. He observes because of the good relations between the two countries Uganda goods are rarely auctioned.

But Balyejjusa said the Kenyan authorities have had hundreds of vehicles crushed claiming the owners have failed to pay for them.

“I had eight vehicles five of them have been crushed. The vehicles of some people have been vandalised,” Balyejjusa disclosed.

On average a saloon car pays $75 (sh200,000) per day in demurrage charges. Balyejjusa said one is given 14 days as a grace period for storage of vehicles in the Container Freight Station (CFS). Beyond 14 days you pay demurrage charges.

Ambassador Julius Onen, the trade ministry permanent secretary, said some traders had cleared their vehicles since then.

Onen noted that 2005 was a long time and wondered how the other vehicles have remained in Mombasa since then.

“Let them come to the ministry and we look at their case,” Onen said.

Jjemba Mulondo, member KACITA, coordinator of over stayed motor vehicle rescue committee said they have not been helped by Ugandan authorities.

“There is some good will in Kenya, but people in Kampala are indifferent. They are asking us to pay taxes first for the vehicles before they give us a recommendation. They don’t know the status of the vehicles because some are vandalised, we can’t pay the taxes before seeing the vehicles. What if it was crushed or some of them the lights, tyres have been taken off,” Mulondo said.

He said there are also over 800 containers of Uganda bound goods which have accumulated demurrage charges.

They contain building materials, textiles, spare parts, electronics and food items.