URA ready to crack down on foreign-registered vehicles

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The Uganda Revenue Authority has noted with concern the increasing number of foreign-registered motor vehicles on Ugandan roads despite numerous operations to impound them.  

URA says that currently, they cannot tell how many such vehicles are in the country.  However, in 2019, more than 100 cars were impounded. The Covid-19 outbreak affected the operations in 2020. 

Most of these vehicles are said to be violating the traffic and customs laws of the country, according to the tax collection body. However, some are legally on the roads, having complied with the requirements. 

URA says that first, their duty is to remind or sensitise taxpayers of their obligations before they launch other enforcement measures. Offences related to this practice cost the government Ushs 10-15 billion per year, while motorcycles lead to a loss of about Ushs 7billion. 

For a foreign-registered vehicle to move on a road in Uganda, they must bear a Temporary Road License acquired at the point of entry. Any such vehicle that does not bear the license is deemed to have been smuggled into the country, particularly crossing the border at ungazetted crossing points.   

The influx of vehicles without the license is attributed to the porous borders, with many crossing points and corrupt security officials along with the borders, whose are easily compromised.  

Timothy Malinga, a Customs Supervisor at URA says that much as the East African Community integration allows for free movement of persons and goods, such motor vehicles are considered temporarily imported.   

The owners are expected to take them out of the country before the temporary import license that costs US$20 (Ushs 3,680) expires, as per the EAC Customs Management Act.        

The smuggling of cars is also attributed to the differences in the tax regimes which make it easier to buy a car in one country than in another. Along the border areas, owners of motor vehicles and cycles say it is much easier to import a car into South Sudan, Burundi or the Democratic Republic of Congo due to low taxation levels, and this has seen some Ugandans import cars through those countries.          

However, authorities say after the expiry of the temporary license, if the car is not taken out of the country, the owner must pay Ushs 3 million per year. But there are also many cars with registration numbers from as far as South Africa and the UK.      Some of these are driven into the country by Ugandans in the diaspora who prefer not to re-register them, while others are owned by expatriates. The law compels both to apply to the URA for registration and licensing of their vehicles if they are to continue to be driven on the roads.     

Unfortunately, some unscrupulously drive the cars out of the country and back, after getting a new temporary road license, which URA says is also illegal, according to Malinga.     


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