By Our Reporter
URA will potentially collect more than 36 million from a textile smuggler that was intercepted in Jinja on Tuesday this week.
The URA enforcement officers in Jinja intercepted a Toyota Kluger that was fully loaded with smuggled textiles from Kenya that was loaded with 300kgs of plain polyester textile from India and 800kgs of Kitenge fabric that is estimated to yield revenue worth UGX 36,531,844 in taxes and penalties.
According to data from world Bank, Uganda imported textiles worth USD 327,411.13 taking up 3.7% of imports in 2020. Majority of these imports come from China, India, Vietnam and Europe.
In 2021, following an amendment to the East Africa Community Customs Management Act (EACCMA) 2004 to increase the import levy on textiles into the bloc, Uganda increased the import duty on textiles from 25% to 35% of the CIF or USD 3/3.5 per kilogram whichever is higher.
After talks with Ministry of Finance and URA, the government halted this method of collecting taxes on textiles for a year but late reintroduced it in FY 2022/2023. To date, this trade tariff unsettled textile traders’ relations with government over the past 3 years.
In April 2024, traders in Kampala demonstrated in a sit-down strike and closed their shops protesting a number of tax issues such as EFRIS, and added a call to government to reduce the import duty on textiles.
In a meeting with the traders in March this year, the Permanent Secretary Ministry of Finance and the Secretary to the Treasury (PSST) Mr Ramadan Ggoobi, together with URA Commissioner General, Mr John Musinguzi, asked the traders for time to have the policy reviewed.
“We asked the traders to give us time to relay these requests and observations from administering this specific tax back to Cabinet, and then Cabinet can make a decision,” noted Mr Musinguzi during a recent interview on the NBS Morning Breeze show.
Mr Musinguzi also noted that tax measures such as the import duty on textiles are deliberate steps by government to promote the young textile manufacturing industry which could easily make Uganda a leading producer of good cotton products as opposed to exporting the raw material.
In accordance with sections 199(iii) and 200 of the EACCMA, the owner of the Toyota Kluger impounded in this operation is liable to a fine not exceeding USD 5,000 for the means of conveyance in smuggling.
In other news, URA has seized smuggled goods worth over UGX 200 million in taxes and penalties in Mbale district.
The goods were impounded in focused operations carried out in the last two weeks, according to customs officer Luke Kivumbi. Mbale district has in recent years become a hotbed for smuggling, with smugglers using porous borders to bring in uncustomed goods from Kenya.
A Toyota Noah registration number UAU336J intercepted early in the operation was found to be ferrying smuggled consumer goods, including bar soap, wheat flour, energy drinks, and used clothes.
2435 square meters of polyester jacquard curtain material and 500 kg of Ingrams herbal cream were recovered from a truck registration number UBG968W.
The biggest “catch” of the operation was a truck registration number KDN185Y that had concealed curtain material and an array of commodities under matooke. The foreign truck accessed Uganda through the porous borders in Bukwo.
Thorough verification revealed over 700 pieces of kid’s clothing, 25 cylinders of Trifluoroethane Pentafluoroethane gas, cosmetics and hair products, women’s clothing, flat TV appliances, circuit breakers, a Honda motorized sprayer, and other assorted items.
During the operation, the team also hit two consolidation centers, where they retrieved over 90 cartons of bar soap, 10 cartons of wheat flour, and Kitenge material. They also did not spare motorbike smugglers, as two were intercepted and 30 cartons of wheat flour were recovered.
According to Kivumbi, the impounded goods are worth an estimated UGX 200 million in taxes and penalties.
Porous borders continue to pose a risk in the fight against illicit trade.
Ibrahim Bbossa, the Assistant Commissioner for Public and Corporate Affairs at URA, says the tax body has put strategies in place to stop uncustomed goods from flooding the market. These include using non-intrusive inspection technology, using informers, raiding suspected stores, and stepping up enforcement in high-risk areas.
