Small-scale traders in Uganda who import goods from China are currently in a tight fix over gaps in cargo documentation, rising import tax bills, and overall bureaucracy despite advanced trade management tools from their country’s regulatory body.
According to the East African Publication, a recent directive from the Uganda Revenue Authority (URA) requires importers to submit master and house bills of lading for all cargo containers arriving in the country. This new directive has left traders in the country who usually prefer consolidation of cargo in a dilemma.
The country’s revenue authority explained the reason behind its new directive in a statement accredited to one of its principal officers.
- “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.
The failure to provide a house bill of lading documentation amongst small-scale traders in Uganda has led to a prolonged duration for clearance of import cargo, increased warehouse bills accrued by affected traders, and cases of prohibitive import tax bills.
In response to the directive by URA, a local shoe importer explained the complexities and difficulties faced by importers in the country during the clearance process of their imported cargo.
- “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 the 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.
Another importer explained why it would be difficult to get house bills of laden from Ugandan importers citing their mode of import as a major stumbling block to the directive.
- “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
Despite the concern raised by the traders, URA still insists on the documentation. A tax director explained the anomalies the agency was trying to curb by insisting 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,” said Jet Tusabe, tax director at BDO Uganda.
The Ugandan Revenue Authority has made some recent technological investments in its customs system to improve the quality of service and also sharpen its detective abilities to checkmate any form of malpractice and suspicious cargo movements.
What To Know
- 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, including owners’ names and addresses plus their purchase values.
- Uganda’s Imports from China hit $1.65 Billion in 2021 according to the United Nations database on international trade.
