In order to reduce importation of second-hand cars in Uganda, the government recently increased taxes for such vehicles. The government of Uganda pointed out that the old cars were not safe and were contributing to pollution of the environment.
In 2014, over 45,000 cars were imported into the country according to Uganda’s Revenue Authority. Among these, 85 percent were used vehicles while only 15 percent were new cars. The minister of Environment, Frank Tumwebaze revealed that second-hand vehicles imported to the country were aged up to 16 years. The primary source of used cars was Japan.
Uganda has also taken the initiative to amend the Traffic and Road Safety Act that aims at outlawing the importation of old cars. Vehicles aged more than eight years will attract of a fine of 50 percent for environmental tax while those between five and eight years will attract a fine of 35 percent. However, goods trucks and industrial vehicles will draw lower taxes.
The National Environment Management Authority through Tony Achidria noted that the increase in environmental tax was long overdue. Mr. Tony pointed out that NEMA was not only concerned with pollution but also the risks of accidents caused by smoke emitted by the old vehicles. The smoke leads to poor visibility and motorists try to overtake such old cars to avoid the smoke, therefore, increasing the risks of accidents.
The increased taxes on imported used cars also seek to boost the local car manufacturers in Uganda such as Kiira Motors Corporation which was established in 2007. Kiira Motors is cooperation between Makerere University and the Ugandan government and it has since designed several electric and solar powered vehicles. The government recently announced that it would invest $32.4 million into Kiira Motors to kick-start the commercialization of their electric cars. The CEO of Kiira Motors, Paul Musasi welcomed the move to increase taxes on used cars and investment in the company saying that it would help grow the country and create wealth and jobs for Ugandans. However, a majority of the public is not pleased pointing out unaffordability of new vehicles.
