Uganda traders in a fix over tight rules on China imports

Sunday April 07 2024

Uganda Revenue Authority (URA) staff at the Electronic Cargo Tracking System office in Kampala, Uganda. PHOTO | FILE | NMG


Ugandan small-scale traders who buy goods from China are grappling with gaps in cargo documentation, rising import tax bills and bureaucracy even with advanced trade management tools from the taxman.

A directive by the Uganda Revenue Authority (URA) that requires importers to submit master and house bills of lading for all cargo containers arriving in the country, has left the traders who prefer consolidation of cargo in a dilemma.

A master bill of lading refers to a freight document that provides details about the ownership of goods packed in a container, names of the shipping company, cargo destination, supplier’s names and Cost Insurance Freight (CIF) value among others.

A house bill of lading refers to a freight document that gives a breakdown of batches of goods consolidated in a single container, owners’ names and addresses plus their purchase values.

Read: Uganda asks China for more market access

“A cargo container that arrives in the country must have a master’s bill of lading and a house bill of lading attached to it in case of multiple batches of cargo. But some containers arrive from China with a master’s bill of lading while the house bills of lading are missing.


So, how do you tell that certain cargo in a container belongs to someone downtown?” said Abel Kagumire, URA’s Commissioner for Customs.

He added: “We usually ask for cargo delivery notes from affected traders but they cannot provide them either. We’ve discussed this matter with Kampala City Traders Association (Kacita) for the past 10 years to no avail. In fact, I’m going to block some of the clearing agents that handle such cargo containers.”

Failure to provide house bills of lading among small scale importers has led to prolonged turnaround times for clearance of import cargo, considerable warehousing fees incurred by affected traders and cases of prohibitive, import tax bills, local sources indicated.

“URA takes several days to verify house bills of lading and this leads to high costs of warehousing for goods awaiting clearance at customs offices and import tax bills sometimes exceed purchase value of one’s cargo. Some traders are ignorant about customs clearance procedures and this causes huge business expenses,” said Jacqueline Namakula, a local shoe importer.

“The stiff tax regime has pushed local traders to the wall and most of them have resorted to consolidating import cargo in order to make ends meet. That is why you find a single ‘40’ feet container loaded with many batches of cargo that belong to 30 different traders in this town! How do you mobilise house bills of lading for all those goods in a short time?” said Issa Sekitto, spokesperson for Kacita.

Read: Uganda proposes new taxes on key products

But URA insists on the documentation.

“Asking for house bills of lading for container cargo helps URA minimise distortions between traders’ customs declarations and domestic tax returns. Some traders collude with Chinese agents to distort import values for their cargo in order to slash their tax bills. This has compelled URA to cross check import values using its own channels,” explained Jet Tusabe, tax director at BDO Uganda.

Recent technology investments made in URA’s customs system include software upgrades on the Asycuda World transaction platform and establishment of a National Targeting Centre that monitors suspicious cargo movements and non-intrusive scanners capable of screening cargo delivered at border stations in real time.