Uganda has tightened import conditions for vehicles aged over nine years, a move that is expected to disrupt the automobile black market in Kenya.
In a new directive by the Uganda Revenue Authority (URA), imports of vehicles older than nine years will from July 1, 2022, be cleared under the East Africa Community’s Single Customs Territory (SCT), which allows members of the bloc to jointly collect customs taxes.
“Pursuant to section 64 (k) of the East African Customs Management Regulations 2010, the Uganda Revenue Authority wishes to inform the general public that effective July 1,2022 motor vehicles of nine years old or more from the date of manufacture shall no longer be cleared under the warehousing regime,” URA as quoted by Smart Business.
The move will translate to improved fortunes for local dealerships long inconvenienced by smuggled units from the neighbouring country.
Currently, importers of vehicles destined for the Uganda market are allowed to store their units in holding units approved by tax authorities—commonly referred to as bonded warehouses– pending payment of customs duties.
This implies that one can ship in a much older car through Uganda, declare low custom value and pay much lower taxes compared to direct importation into Kenya where the maximum age limit on used cars has been set at eight years.
Uganda’s move is a measure to bring the country’s car age limit closer to the EAC resolution that had recommended the slashing of the age limit for imported cars to five years by 2021.