Section 11: Data warehousing

7.7.13 Time of Supply This refers to the date on which a supply is deemed to have taken place. The purpose of time of supply is to guide in determining the tax point. Tax point determines the VAT period in which output tax should be accounted for and credit for input tax be taken into consideration. There are different provisions for the different circumstances as detailed below. SN Nature of supply Time of supply 1 Goods/Services for Date on which goods or use services are first applied to own use own use 2 Supplies by way of gifts Goods: Date when ownership passes to the recipient Services: Date when the performance of services is completed. 3 In case of rental The earlier of the following agreements or periodic Date when payment is due payments Date of receipt of payment for each successive payment 4 Supply under cash Date when one received cash to account for output or date when one basis pays cash to account for input tax credit 5 Ordinary (usual) supply The earlier of the following: Invoice date. Payment date. Delivery date. 6 Import of goods. For goods where import duty is payable, time of supply is the date when the duty is payable. Where duty is not applicable, time of supply is the date when goods enter into the country. 7.7.14 Mixed Supplies Under the VAT regime, supplies are categorized as either goods or services. There are times when a supply of a good involves a supply of a service; or vice versa. This type of supply where one is incidental to the other is referred to as a mixed supply. 7.7.15 Computation of VAT Computation of VAT occurs at two levels: VAT on a transaction i.e. a sale or a purchase VAT payable or claimable by the taxpayer other way put is VAT collectable or refundable by URA Key terms in VAT Computations Tax rate: This is the percentage that is applied to the consideration for a transaction or taxable value, so as to determine the VAT amount. For example: if the consideration or taxable value is Shs. 20, 000 and the VAT rate is 18% (18/100), then VAT = 20,000 x18/100 = Shs. 3,600 Tax Fraction: This refers to the ratio used to determine the amount of VAT where the consideration is inclusive of VAT. The fraction is given by the formula: __r_____ r + 100 where r is the VAT rate. If the rate of tax (r) = 18% then the tax fraction = 18/ (18+100) = 18/118. For example if the consideration (VAT inclusive) is Shs. 20,000, then VAT = 20,000 × 18/118 = Shs. 3051. 7.7.16 Apportionment of Input Tax Credit For a taxable person that deals in both taxable and nontaxable supplies, input tax credit is apportioned and claim only that part or percentage that relates to taxable supplies/ sales using the formula: Input tax credit = A × B/C Where: A is the total input tax in the period B is the total taxable sales in the period. C is total sales (both taxable + exempt). 7.7.17 Standard Alternative Method (SAM) Another method of apportionment called SAM is used when disadvantaged by the above method. It is used when a taxable person obtains an approval from URA upon application. Under this method, input tax credit is determined as follows: • Claim all input tax that is directly attributable to taxable supplies. • Disallow all input tax that is directly attributable to exempt supplies. • Apportion all input tax that is not directly attributable to either taxable or exempt supplies using the above formula A × B/C. 7.7.18 Non-Allowable Input Tax Credit The general rule is that input tax incurred for business purposes should be allowed or credited to the taxpayer. However, the VAT Act disallows some input tax credits. The following input tax credit is not allowed though incurred in respect to business activities. • Passenger automobiles: VAT incurred on purchase or importation of passenger auto- mobiles is not credited to the taxpayer. This includes purchase of spare parts, repairs and maintenance of Passenger automobiles. • Exception: Input tax is allowed for purchase of passenger vehicles as stock for resale in a business activity and carrying on the business of tour operations. • Entertainment: VAT incurred on entertainment is not allowed. Entertainment includes food, drinks, tobacco, accommodation, amusement, recreation, or any other form of hospitality. Exception: • This can be allowed if the taxpayer is in the business of providing entertainment itself. • It can also be allowed if supplies were meals or refreshments to the taxpayer's em- ployees in premises operated by the taxpayer or on behalf of the taxpayer solely for the benefit of the taxpayer's employees. • Input VAT incurred on payment for entertainment made by a taxable person for mem- bership of a person of a club, association, or society of a sporting, social, or recre- ational nature on membership in a club, association or society of a sporting, social or recreational nature will not be claimable. • Telephone services: Ten per cent (10%) of input tax on telephone services is not allowed. Exception: If at the hotel a client was charged output VAT for using the telephone, the corresponding input tax charged to the hotel owner is allowed. • Non-residents who do not have a place of business in Uganda providing services to non-taxable persons in Uganda will not be entitled to claim input VAT credits 7.7.19 Tax Invoice It is mandatory for all VAT registered taxpayers to use EFRIS to issue e-invoices or e-re- ceipts for all business transactions. No tax credit is allowed or claimable on purchases unless they are supported by e-in- voices or e-receipts The Electronic Fiscal Receipting and Invoicing Solution (EFRIS) is a new smart business solution used to record business transactions and share the information with URA in real time. An e-invoice or e-receipt is an electronic document that is required to be issued by a VAT registered person upon making a taxable supply. It shows that a sale has occurred through EFRIS. An e-invoice or e-receipt shows the seller's details, URA information, Buy- er's details, Good and services details, Tax details and Summary sections. Illustration Nyero cotton farmers sold 10 tons of cotton to Brad ginnery at shs. 7,000,000. Brad a cotton ginnery sold 10 tons of lint cotton to Nyanza textiles at Shs.10, 000,000. Nyanza textiles produced bed sheets out of the cotton and sold them to Kiyembe Ltd (a retailer) at Shs.17,500,000. Kiyembe Ltd sold all the bed sheets to various customers and total sales were Shs. 22,500,000. All figures are exclusive of VAT and VAT rate applicable is 18%. Determine the total VAT payable through the process. Illustration Stage / dealer Cost Price Selling Price Input Tax IT Output Tax OT URA Account (C.P) (S.P) (18% * C.P) (18% * S.P) (OT - IT) Nyero farm 7,000,000 - - Brad ginnery 7,000,000 10,000,000 - 1,800,000 1,800,000 Nyanza textiles 10,000,000 17,500,000 1,800,000 3,150,000 1,350,000 Kiyembe Ltd 17,500,000 22,500,000 3,150,000 4,050,000 900,000 Final Consumer 22,500,000 - 4,050,000 - - TOTAL VAT TO URA 4,050,000 Note that Nyero cotton Farmers do not have any VAT to remit to URA since they sell raw cotton (unprocessed) to the ginnery, however the VAT component starts at the ginnery when the seeds are being removed from the cotton (Lint cotton) up to the Kiyembe limited selling to the final consumers. The total VAT is remitted to URA by the players in the value chain. 8.0 INCOME TAX CLEARANCE CERTIFICATE (TCC) A Tax Clearance Certificate - TCC is a document issued by the Commissioner on request by the taxpayer, certifying that the taxpayer is compliant with his tax obligations. It is only given to taxpayers who have consistently been compliant with their tax obligations. A TCC is normally required by: • A taxpayer providing passenger transport services; or a freight transport service where the goods vehicle used has a load capacity of at least 2 tons. • All tax payers in this category must have paid their advance Income tax in accor- dance with the laws in order to obtain a tax clearance such that they can renew their Operator's licences. Advance Income tax is paid using the schedule: i.e. A tax of Ugx. 50,000 per ton for goods vehicles with a loading capacity of at least 2 tons and a tax of Ugx 20,000 per passenger per year for passenger service vehicles (PSVs) or Public Omnibuses (PMOs). This tax when paid shall be the final tax for this category in that year of income. • A taxpayer supplying goods or services to the Government. • A tax payer providing warehousing or clearing and forwarding services. • Any person transferring funds abroad above shs 50 million. Note that any person who requires a tax clearance certificate shall apply to the Commissioner for the certificate as proof of tax compliance. 9.0 TAX STAMPS A person dealing in goods, whether locally manufactured or imported is required to attach a tax stamp on goods manufactured or imported. The Minister prescribes, by statutory instrument, the locally manufactured or imported goods on which tax stamps shall be affixed. The commissioner of URA recommends the manner in which a tax stamp is to be affixed to goods. Penal tax relating to tax stamps • A taxpayer who fails to affix a tax stamp on goods prescribed above is liable to pay a penal tax equivalent to double the tax due on goods or fifty million shillings, which- ever is higher. • A person who prints over or defaces a tax stamp affixed on goods prescribed above is liable to pay a penal tax equivalent to double the tax due on the goods or twenty million shillings, whichever is higher. • A person found in possession of goods prescribed above on which a tax stamp is not affixed, is liable to pay a penal tax equivalent to double the tax due on the goods or fifty million shillings, whichever is higher. • A person who attempts to acquire or who acquires or sells a tax stamp without the authority of the Commissioner commits an offence and on conviction, is liable on con- viction to a penalty equivalent to double the tax due on the goods or ten million shil- lings, whichever is higher. 10.0 NON-TAX REVENUE (NTR) This refers to duties, fees, and levies that are charged by Government for the provision of specific services and penalties for specified offences. Non-Tax Revenues (NTR) are im- posed by specific Acts of Parliament and administered by government Ministries, Depart- ments and Agencies (MDAs). The NTR directly administered by URA includes stamp duty and motor vehicle transaction fees these include: registration fees, change of ownership fees, duplicate fees, alteration fees, re-registration fees, OTV fees, cancellation and endorsement fees, search and cer- tification. However, URA collects Other Non-Tax revenue (ONTR) on behalf of government ministries, departments and agencies (MDAs). The most common examples include: • Passport fees • Work permit fees • Court fees and fines • Traffic Express penalties • Land transfer fees • Royalties • Business and Company registration fees • Tender fees • Permit fees Any person can register a payment for non-tax revenue on the URA website if he is aware of the Ministry, department and Agency to which the payment relates and the corre- sponding Payment fees category. 10.1 Stamp Duty This is a duty charged on any instrument listed in schedule 2 of the Stamp Duty Act, 2014 as amended which is executed in or outside Uganda relating to a property or transaction made in Uganda. An instrument is a document that confers any right or liability upon being created, trans- ferred, limited, extended, extinguished or recorded. Note: that stamp duty only applies to instruments listed in schedule 2 of the Stamp Duty Act, 2014 as amended. The rates of stamp duty payable are either fixed or ad valorem depending on the instrument. A fixed duty rate does not vary with the value of the document while an Ad valorem rate varies with the amount or value or the consideration paid, or obligation incurred, or the value of the property affected by the document in question. Transactions involving instruments listed in schedule 2 of the Stamp Duty Act, 2014 are not legally binding if stamp duty is not paid where applicable. The stakeholders who assist URA in drawing, executing and implementing the various instruments for stamp duty include the following; • Banks / Financial Institutions • Insurance Companies • Registrar General's office • Registrar of Titles • Commissioners of Oaths • Administrator General • Hire Purchase Companies • Bonded Ware Houses etc. 10.2 Motor Vehicle Related fees This consists of fees charged on various motor vehicle transactions that are collectable under the Traffic and Road Safety Act Cap 361. Some of the services offered in relation to the fees paid include; • Motor vehicle registration • Change of Ownership of a Motor Vehicle • Duplicate Number plate and Registration Book • Owners Transport Vehicle (OTV) • Dealers /Garage plate ownership • Alterations of particulars • De-registration of motor vehicles • Endorsements of third-party Interests and cancelation • Search and Certification. 10.3 Driver's Permit fees A driving permit is a legal document that permits one to drive a motor vehicle on the Road. It is issued to an applicant who is 18 years and above and for specific classes of vehicles. The mandate of processing driving permits was solely handed over to Ministry of Works. URA's mandate is to collect the due fees that may be applicable. Categories of Permit fees include: • Learner/provisional permit fees • Full driving permit fees • Foreign Exchange permits fees. • Renewal of driving permit fees • Extension of driving permit class fees • Test fees • Duplicate Driving Permit fees Note: • Application for driving permit renewal should be made within 5 years from the date of issue or 2 years from the expiry date; or else the validity of the permit lapses and a new permit must be applied for. • International Driving Permits are inadmissible for exchange. Only National driving per- mits issued by the respective countries' national traffic authorities are accepted. PART C 1.0 INTRODUCTION Customs Department is one of the 7 Departments that form the Uganda Revenue Au- thority (URA) with a core mandate to facilitate international trade. Its core functions are; • Collect Revenue Collection for national development. • Monitor the movement of goods into, out, and through the country • Protect Society against harmful imports. • Protection of domestic industries against unfair competition. • Collection and dissemination of International trade Statistics Figure 1: Map of Uganda Showing Customs Stations 2.0 CLEARING IMPORTS Importation of Goods For Customs Purposes, the clearance of goods is regulated under the East African Com- munity Customs Management Act, 2004 (As Amended), Uganda being a member of the E.A Customs Union Importation of goods means to bring or cause to be brought into the Partner States (East African Community) from a foreign Country. Please note that the movement of goods from one partner state directly or indirectly to another partner state with exception of goods in transit, goods for transshipment or goods for warehousing in a bonded warehouse, is called transfer not importation. Goods may be brought into the country upon making a customs entry or declaration either for; a) Home consumption b) Warehousing c) Transshipment d) Transit e) Export processing zones/Free zones • Goods for home use are those that are imported solely for the purpose of sale or use within Uganda. • Transit goods are those that are intended to be consumed in another country (other than the Partner States) so they just go through the Partner States before they reach their final destination. Goods up to the value of United states dollars Five Hundred ($500) imported by a person/traveler who has been outside Uganda for a period in excess of twenty-four (24) hours shall be allowed a baggage allowance (tax exemption) provided the said goods are in the travelers accompanied baggage and are declared to customs. All goods imported/brought into Uganda must be declared to customs using the services of a licensed clearing agent for that respective year. Note however that, the following goods may be brought into Uganda and be released without necessarily making an entry/declaration; a. Mail bags and postal articles; b. Goods which are bonafide personal baggage of the passenger; c. Human remains; d. Diplomatic bags; e. Subject to an undertaking being given by an owner to customs to furnish the neces- sary entry/declaration within 48hrs of the time of delivery, the loading and delivery to the owner of any bullion, currency notes, coin, or perishable goods may be permitted without any entry/declaration Note. Any person who does not comply with the requirements as provided under e above commits an offence and shall be liable to a fine. 3.0 CUSTOMS CLEARING AGENTS 3.1 Definition A Customs agent is a person who has been appointed by the Commissioner of Customs to transact business relating to Customs on behalf of other people. 3.2 Dealing with clearing agents and not importers Because, it is a requirement by law under sections 146 and 147 of the East African Community Customs Management Act (EACCMA). Clearing agents are mandated to provide professional services of tax declaration to importers and exporters. The Uganda Revenue Authority [URA] deals with licensed clearing firms represented by agents. However, even though you must have a clearing agent assist in this function; do not be ignorant of your tax affairs. The URA web portal is a useful resource with free tax material. When you log on, look out for the section 'Information library' and select the appropriate tax information required. You can also find updated circulars and notifications and the exchange rates for tax purposes. 3.3 Expectations of a clearing agent There are many expectations, including: • Acquire an authorization letter from the owner of goods. • Obtain import/export documents (e.g. original import documents - bill of lading, invoice or parking list or any other documents that relate to the importation or ex- portation of goods). • Go to the bonded warehouse or the border stations where the goods are and pro- cess transit or import documents for final clearance. • Provide, whenever required by customs administration, an authorization form from the firms or persons by whom he is employed to act as their customs agent; • Represent a client in any matter related to customs; • Advise a client against non-compliance to customs laws. • Exercise due diligence to ascertain the correctness of any information which he im- parts to a client with reference to any customs operations. • Not withhold information relating to customs operations from a client who is entitled to such information. • Together with the importer, promptly pay government any duties, taxes or other debts and promptly account to his clients for any money received for them from government. Please note carefully: Importers should never hand over the payment obligation for taxes exclusively to the clearing agents. Payments for taxes should always be made directly to URA through the authorized channels (banks, cheque, mobile money, URA USSD code *285#, AskURA App, demand draft, VISA, MasterCard, American Express, UnionPay, EFT, RTGS, and SWIFT, or Point of Sale). Clearing agents are also expected to: • Not attempt to influence the conduct of any officer of customs in any matter pend- ing before customs by the use of threat, false accusation, duress or the offer of any special inducement or promise of advantage, or of any gift. • Not procure or attempt to procure, directly or indirectly, information from customs records or other government sources of any kind to which access is not granted. • Inform the customs administration of any change of address before such a change is effected. 3.4 Importance of a clearing agent An agent, authorized by the owner to act on their behalf in writing, will be responsible for preparing and presenting the declarations to Customs. The agent may also sign any other documents on behalf of his client on request if authorized by the Customs Act. The agent will ensure that all taxes due are paid as required on the consignments he/she handles on behalf of the owner. 3.5 Finding a genuine clearing agent Clearing agents are licensed for each calendar year and license expires on the 31st day of December each calendar year. Please look out for the license for that respective year. Additionally, the importer should check out the licensed agents list on the URA web portal to ascertain authenticity of any agent seeking business. The importer or client should insist on identification and also visit the office of the firm where the agent works or visit any URA Customs office and inquire before appointing the agent. 3.6 Licensing customs clearing agents Customs agents must be licensed by the Commissioner before they can be involved in the clearance of goods through Customs. An application on Form C20 must be made and presented to the Commissioner for consideration. An application fee of US$ 50 and an annual license fee of US$ 400.00 is payable for the license. The Commissioner can only license people/companies who are registered, knowledgeable about Customs clearance and have an office with equipment like computers. Licenses will not be issued or renewed if the licensee or applicant has a criminal record, is involved in dishonest activities or any other wrong doing. The validity period of a Customs Agent license is 1 calendar year. Licenses obtained in the course of the year all expire on the 31st December of every year. Renewal of license is not automatic. It is subject to the Commissioners approval based on considerations like: all queries have been answered and no major offenses have been committed. 3.7 Agent involvement in illicit activities If the agent is involved in illicit activities, the owner of goods being cleared through Customs is responsible for what the authorized agent does during the period he/she is acting on his/her behalf. Both the owner and the agent will be prosecuted for any unlawful acts done by the agent acting on his/her behalf. 3.8 Obligations of the client to the agent The client must provide the agent the relevant documents in unaltered state and equip the agent with a true and correct position to avoid misrepresentation. 3.9 Requirements and conditions for Licensing of Customs Agents a. Submission of duly completed application form (C.20) after payment of application fee of US$ 50 (Fifty dollars); b. Must have an office with sufficient equipment with the following ASYCUDA World Sys- tem End User Specifications; c. The physical location/address must be indicated in the application form or verifica- tion; d. Certificate of Incorporation, company Form 7 or Form 20, Memorandum and articles of association should be attached on the application. Category Specification Requirement PC Minimum Requirement 2 GB RAM Evidence of ownership of computers and 2 GHZ Dual Core associated equipment such as scanners 250+ GB Free Disk Space will be required. Adobe PDF reader installed Java 6 or higher Presence of an Anti-virus software Network Minimum 128 Kbps network speed Contract with internet service provider requirement Dedicated and non- should be attached intermittent e. The applicant must be tax compliant in all tax heads, i.e. corporation tax, VAT and income tax for the company itself, the directors, shareholders and employees; a tax clearance certificate is required; f. The applicant must provide a sample of the original company/firm headed letter and stamp impression; g. Shareholders, Directors and employees must not have an interest in more than one clearing company/firm; h. Particulars of the bank account/s must be indicated on the application form; i. Recent passport sized photographs of directors and staff duly certified by a Notary Public or a Commissioner for Oaths should be attached; j. A minimum of two employees in charge of clearing of goods in Customs should be in possession of a diploma or certificate in customs clearing & forwarding from a recog- nized institute/EACFFPC for purposes of transacting business; k. Evidence of their employment contract and compliance with all statutory obligations is required l. Proof of affiliation or membership of a RECOGNIZED clearing & forwarding association; m. A valid tenancy agreement with stamp duty duly paid, for suitable office accommo- dation valid up to 31st December 2018 or proof of ownership of office accommodation; n. Payment of license fee of US $400 (four hundred dollars) on approval of application; o. There will be no handling of transit (inward, outward and transit through) unless after presentation of a bank guarantee and demonstration of the companies' finan- cial capability to handle such consignments at entry/exit points; p. Practical and written competence assessments will be conducted for the declaration staff of the company on Customs matters; Passwords will be issued to those who suc- cessfully pass the assessments. Companies whose declarants fail the Competence assessments will not be licensed. q. All licensed companies shall be subjected to performance measurement (KPIs) to as- sess efficiency in service delivery and compliance to Customs laws on a monthly basis. Annual performance rewards shall be granted to the best performing firms and those who fall below minimum expectations will be relegated. r. Any Company involved in any fraudulent Act against Customs Laws and Procedures shall have its license suspended and or revoked. s. The Company performance score (KPIs) will form part of eligibility for licensing. t. The companies shall have no outstanding transactions dating as far back as 30th June 2017. 3.10 Online appointment of agents Logging in to access the portal account i. Enter URA link https://www.ura.go.ug in the Address bar to access the URA Portal. ii. The user shall click the Login option and select portal from the drop down menu to open the login options. iii. The user enters the TIN in the space labelled Login Id and password (See figure) N.B: All users must have a recognized TIN that is used as an ID when logging in. 3.11 How a clearing firm registers to handle imports/exports By now, the agent and all the clients have a registered account on the URA Portal where each uses the individual TIN to log in. Below are the steps that an agent firm shall follow in order to register and be able to clear goods, be appointed and accept appointments from clients. i. The firm shall log in as in the steps earlier and will open the page as in screenshot ii. Under e-Services, the firm will access E-Registration and by moving the curser against E-Registration, will click Registration under Tax Agent Registration (See Figure above). iii. Under Agent registration, select Tax Agent and submit iv. Under the Tax Type Details, the firm selects/Checks the tax type, Imports and Exports and input the activation date (See Figure below) v. The box for entering the License number (Agents license number) will be activated. vi. The agent firm enters the license number in the format it is on the agent license vii. The license period will be automatically populated when the correct license number is entered. viii. If the agent firm is not registered, an error message, ''you cannot register as Customs Agent as you are not registered for Import and Export Tax Type.'' ix. When the license number supplied is correct, the user clicks 'Submit' to complete the registration process. NB. The agency firm is available for appointment ONLY after registering on the portal and therefore will not be available for appointment 3.12 Appointment of the agent employee by the agency firm i. The agency firm logs into their portal account as shown above ii. Under e-Services, the authorized agent representative clicks the option, Appoint Em- ployees. iii. The dialog box were the employer enters the employees TIN, appointment date, ID number etc. opens up. iv. The employer will enter the TIN of the employee, the date of appointment and all the relevance employee information v. Clicks 'Submit' when all the employees' particulars have been properly entered. vi. After submission, the employee's details will be sent to ASYCUDA World automatically. Thereafter, the user login credentials will be created in ASYCUDA World and sent to the specific employee appointed using the email provided in eTax at the time of ap- plying for the TIN. Users will be accessing using their TIN as the login Id. Should the employer wish to stop their employees from accessing ASYCUDA World, then they can de-activate the employee. 3.13 Appointing a clearing firm by the trader i. The trader logs into their URA portal account ii. After logging in, clicks 'Appoint Agent' under e-Services. iii. The trader gets options under Customs Clearing Agent including; · Appoint Agent · Deactivate Agent · View Appointed Customs Agents iv. To appoint an Agent, Consignee/Trader selects Appoint Agent v. A dialog box will open for the trader to enter the TIN and date of appointment of the firm being appointed vi. The TIN of the client appointing will be auto populated and the trader enters the TIN of the clearing Firm to appoint the agent firm in the next. vii. The trader will then select the first date of appointment from the calendar on the right of the 'Appointment from Date' box by clicking on the calendar icon. viii. Enters the closing date of the appointment in the next box (Appointment to Date) ix. Clicks Submit' if everything is correct. x. The agent will receive an email and an SMS notifying them of this appointment. xi. The agent will then accept or reject the appointment xii. The appointing firm will get a notification by mail and or SMS when the appointment is accepted or rejected. xiii. Once the agent accepts the appointment and the message of acceptance is re- ceived by the appointing trader, the process would have been concluded. N.B. Like it is for employees, the trader can also de-activate the firm they do not wish to continue with. A trader can appoint only three agent firms at a go and these shall be the only ones au- thorized to handle imports or exports for the trader that appointed them. For additional support, please write to [email protected] or WhatsApp: 0772140000. Users can also compose a mail to access URA support while logged into their portal ac- counts to access our support. 4.0 DECLARATION OF GOODS When goods are brought into a customs area e.g. a border entry point, customs must be informed of the person responsible to fulfill the customs obligations with regard to the goods on board. This can be the owner of the goods or a third party, including customs brokers, agents and transporters referred to as declarants. The importer or his authorized agent (declarant) enters the goods on a Customs Single Bill of Entry or the Single Administrative Document (SAD). The declarant must furnish a formal report to Customs within 24 hours and make the nec- essary declaration in respect of the imported goods to the Customs Officer. The EAC-CMA prohibits the removal of any goods from a Customs area before they have been dully reported and entered. Goods may be entered for; a. Direct home use, where goods are entered and paid ready for home consumption. b. Transit, where goods are entered to be moved from one customs area to another and across the border into another country. c. Temporary importation, i.e. where goods are imported temporarily for a specific peri- od of time and intended to be returned after use d. Warehousing, i.e. where an importer is not ready to clear the goods immediately, the goods must be kept in a customs bonded warehouse until such a time when they can be released. Determination of tax payable is made in consideration of the Customs value, tax rates based on the customs tariff nomenclature (EAC- CET) and the Origin of the goods or other instruments of the law, which are provided for in the relevant schedules of the EAC- CMA (2004) In Uganda duties and taxes are payable through self- assessment procedures where taxpayers through their appointed clearing agents make declarations in the ASYCUDA World system and proceed to make payments in designated banks. This declaration system provides a quicker and more efficient service with less paperwork. It also provides an effective means of identifying and preventing fraud. 4.1 Selectivity of Declarations Upon payment of taxes assessed, goods are subjected to random selectivity based on risk assessment criteria leading to either physical examination or documentary check or direct release of the goods. There are four, Yellow, and selectivity lanes that is Blue, Green Red. Declarations whose risk category is low (Those in the Green lane) are immediately released while those selected red are automatically assigned to the verification section for physical examination. The declarations selected yellow are considered medium risky and are for documentary check therefore are submitted to the document examination section and also automatically assigned to the documentary check officer. The blue lane transactions are considered low risky and clients compliant and these shall be submitted to the Post Clearance Audit unit for auditing (Most categories of blue lane goods are raw materials with low risk) 4.2 Physical Examination This refers to the verification /physical counting, weighting of goods to ascertain their quantity, quality and description as per the declaration. In case of discrepancy, the goods will be subjected to offence procedures. 4.3 Document Check Document check means the systematic analysis of all supporting documents by customs for purposes of proper valuation of imported goods. It can also refer to examination of documents for completeness, authenticity, accuracy and correctness of the information declared in relation to the Single Administrative Document (SAD) Customs documents can be broadly categorized as follows; • Commercial Documents • Transport Documents • Financial Documents • Regulatory Documents Type of Document Details Commercial Purchase order, Proforma invoice Sales Contract Commercial invoice, Receipt, Packing list Transport Shipping Bill / Export Document Bill of Lading / Airway Bill Freight Invoice Freight debit note Insurance certificate Insurance Debit Note Regulatory Certificate of origin Permit/certificate of analysis Fumigation Certificate Phytosanitary Certificate Transit documents The Financial Form E Telegraphic transfer Letters of credit Bank draft / Bill of exchange Credit agreement In summary for any imported goods, the following documents are required for making a declaration to customs: i. Bill of lading/airway bill; ii. Insurance certificate; iii. Pro-forma invoices; iv. Commercial invoices; v. Certificates of origin; vi. Permits for restricted goods; vii. Purchase order; viii. Packing list; ix. Sales contract; x. Evidence of payment; xi. Any other supporting documents. 4.4 Direct Release Declarations that are deemed to fully comply with the customs laws and procedure are released without being subjected to some customs controls based on the value of goods and imports however can be subjected to post clearance Audit. 5.0 CUSTOMS VALUATION OF IMPORTED GOODS 5.1 Customs Valuation Customs Valuation is the determination of the Customs value for taxation purposes. 5.2 Customs value Customs value means the value of imported goods for the purposes of levying ad valor- em Customs duties and taxes. • For Goods imported using road rail and marine transport modes, Customs value is a composed of the Price for the goods, cost of insurance and freight. • While for goods imported using air transport, the Customs value is composed of the price for the goods and the cost of insurance. Freight is not included for goods trans- ported by air. The customs value is used as the basis for calculating customs duties. 5.3 Ad valorem duties Ad valorem duties of Customs are duties levied based on the value of the goods and are usually expressed as a percentage of the value. Such duties are distinct from specific values that are based on specific measures for the goods such as numbers, weight, volume, area, capacity etc. There can also be composite duties that are partly ad valorem and partly specific such as garments 3.5 per Kg or 35% whichever is higher. Customs tariff of Uganda levied on different kinds of goods are published in the Uganda Gazette every financial year. 5.4 Valuation of goods There are six international methods for the valuation of imported goods stipulated in the World Trade Organization Agreement on Customs Valuation. They are applied in sequential order. The primary method of valuation is the transaction value, which is the price actually paid or payable for the goods when sold for export to the country of importation. A number of conditions must be met to use the transaction valuation method and it can involve deductions or additions such as commissions or royalties. When the transaction value cannot be used, one of the alternative methods will be used to determine the customs value (methods of valuation) in sequential order • Identical goods value method - Transaction value of identical goods previously cleared through Customs. Identical goods mean goods that are same in all aspect except minor difference such as color, size. Must be of the same brand and country of export. • Similar goods value method - Transaction value of similar goods previously cleared through Customs. Similar goods are goods that have like characteristics and are com- mercially interchangeable; if a customer doesn't find the exact product he/she want- ed can choose an alternative e.g. Colgate and Close up. For goods to be regarded as similar, the brand must be of the same reputation e.g. LG and Samsung; and from the same country of export. • Deductive value method - The basis for the Customs value is the price at which the greatest aggregate quantity of the imported goods is sold in Uganda. Post importa- tion costs and taxes are deducted to arrive at the Customs value. The deductible costs include: Taxes such as VAT, Import Duty, Excise Duty Profits and general expenses e.g. rent, labor etc.; associated to the distribution and sale of the goods as a markup. Post importation Costs associated with the logistics and transportation of the goods to the bonded warehouse. • Computed value method - this is based on the direct cost of producing the goods like raw materials, consumables, general expenses, other costs and profits relating to the production and sale of the imported goods. This method requires to get informa- tion for the country of production. • Fall-back value - where no other methods re suitable, the customs value can be derived based on one of the five methods reasonably adjusted. The method is not used on its own but relies on the sequential flexible interpretation of the 1st to the 5th method until the value of the goods is determined. Customs will determine the value by considering the above valuation methods and any other relevant information. 5.5 Composition of Customs value The customs value will include the following; • Cost of the goods free on board a transport vessel in the country of export. • Freight charges up to the place of importation if the goods are transported by road, rail or Sea. • Loading, unloading, and handling charges associated with transport of goods to the place of importation; and • The cost of insurance. 5.6 Pre-shipment inspection Charges for pre-shipment inspection are normally incurred by the importer or by gov- ernment of the importing country. Such inspection may have been undertaken as per importing country's policy or as the requirement per donor agency financing such import or as importers own requirement. If such charges are paid for the importers benefit, then they should be added to the customs value. 5.7 Charges included in customs value East African Community Customs Management Act (EACMA) requires that amounts for certain charges and the value of certain goods and services, if not already included in the price paid or payable for the imported goods, must be added to the price paid or payable. These charges and v\values are can include amounts for the following: • Commissions and brokerage • Cost of containers • Packing costs • Assists (goods or services provided by the buyer to the seller free of charge or at re- duced price to be used in the production of the imported goods) • Royalties and license fees • Subsequent proceeds (a financial advantage to the vendor resulting from resale, dis- posal or use of imported goods by the purchaser) • Transportation costs and insurance costs to the place of direct shipment to the part- ner state. 5.8 Packing costs The cost of packing overseas, such as labor and packages, is included in customs value of the goods. The cost of containers and pallets imported temporarily are not included in the customs value. 5.9 Currency for customs value The customs value is in the currency as agreed in the commercial invoice. However, for purposes of paying taxes and the invoices are in the foreign currency, the Customs value is converted to Uganda Shillings using the rate of exchange duly published monthly by Uganda Revenue Authority basing the information from Bank of Uganda. 5.10 Calculation of import taxes Step I First determine Customs Value of the item. This is the sum of Cost, Insurance and Freight up to Mombasa port. Step II Change the currency to Ugandan shillings by multiplying the customs value by the prevailing exchange rate Step III Determine the necessary taxes Illustration If you imported a car worth 2,000 dollars, paid 200 dollars for insurance and 300 dollars as freight charges up to Mombasa and the exchange rate is 1 dollar = 3,600 shilling; Step I Customs Value = Cost + Insurance + Freight = Cost + Insurance + Freight = 2000 + 200 + 300 = 2500 Step II Customs Value = Customs value X Exchange rate = 2500 X 3600 = 9,000,000 Step III Determine the taxes. Import duty = 25%, VAT = 18%, Withholding Tax = 6% Import Duty 25% of 6,250,000 = 25/100 X 9,000,000 = 25/100 X 9,000,000 = 2,250,000 VAT 18% of (Customs Value + Import Duty) = 18% X (9,000,000 + Import Duty) = 18% X (9,000,000 + 2,250,000) = 18/100 X 11,250,000 = 2,025,000 WHT 6% of Customs Value = 6% X 9,000,000 = 6/100 X 9,000,000 = 540,000 INFRASTRACTURAL LEVY = 1.5% of Customs Value = 1.5% of customs value = 1.5%X9, 000,000 = 135,000 ENVIRONMENTAL LEVY =50% X 9,000,000 = 50/100 X 9,000,000 =4,500,000 TOTAL TAXES = Import duty + VAT + WHT + Infrastructural Levy + Environmental Levy = 2,250,000 + 2,025,000 + 540,000 + 135,000 +4,500,000 = 9,450,000 NB: Please note that there is a value guideline for used cars. This means that customs value for a used car has already been determined. The value guideline is the basis valu- ing used motor vehicles and not the invoice price as guided by the EAC Ruling on the Valuation of used goods of 13th December, 2013. The motor vehicle value guideline is available on the URA web portal; http://ura. go.ug 5.11 Transactions not considered a sale for export The importer must determine if his goods were imported into the country as a result of a sale. A sale requires a transfer of ownership of goods for a monetary amount (a price). Examples of situations that would not be considered a sale for export to Uganda are: • Goods imported by intermediaries • Free of charge shipments • Goods supplied on loan • Goods imported for destruction • Goods imported by branches • Good subject to Barter trade • Goods imported on consignment • Leased Goods 5.12 Valuation of replacement goods The replacement goods may be invoiced free of charge or invoiced at the original price with an arrangement for giving credit for the original goods in either case the replace- ment goods are to be valued at the original price. 5.13 Treatment of rented or leased goods Hire or leasing transactions do not constitute sales, even if the contract allows an option to purchase the goods. Therefore, in such cases the transaction value method cannot be applied and recourse has to be taken to other methods of valuation. There are case studies provided by WCO for goods on lease but these have very specific application depending on the circumstances. Please Contact URA for guidance on the valuation of goods on lease. 5.14 Record keeping Yes, since post importation audit may take time the importer has to keep records relating to his import transactions for at least five years. (Section 235 of EAC-CMA). 5.15 Appeal against determination of the value by customs authorities Yes, the importer has a right to appeal without penalty. The appeal may be at depart- mental level or to an independent tribunal also known as tax appeal tribunal (TAT) At times, the final determination of customs value may be time consuming. 5.16 Withdrawal of goods from Customs control The importer is allowed to withdraw his goods from customs control pending determina- tion of customs value by providing sufficient guarantee in the form of surety, a deposit or any other instrument as required, covering the final payment of customs duties on the goods. 5.17 Legislation governing valuation Full details relating to the valuation requirements are in the East African Customs Man- agement Act 2004. Our valuation system is based on the world trade organization (WTO) valuation agreement-the system used by major trading nations throughout the world. 5.18 Obligation to declare Declaring a value - Invoices a. a) Section 34 of the East African Customs Community Management Act (EAC-CMA), 2004, requires the importer to: • Make due entry on a Customs declaration; • Provide information as required; and • Answer all questions relating to the imported goods. b. This would include sufficient information to enable the Customs officer to determine the actual value of the imported goods. c. Before a Clearing Agent declares a value, based on a transaction to which he/she is not the importer, the importer must be sure that such a transaction satisfies the criteria discussed above and be prepared to submit further supporting evidence as described, upon request by Customs officers. d. Any importer or agent who declares a value to Customs without necessary support- ing documentation would not be exercising reasonable care and may be subject to a penalty or other enforcement compliance measures as prescribed in the EAC-CMA, 2004. e. An entry shall not be valid unless the true value of the goods on which duty is leviable, or which is required to be declared under the provisions of the EAC-CMA have been declared. This include all particulars of the transaction value or of any: i. Commissions; i. Discounts; ii. Cost of containers; iii. Cost of packing (material and labor); iv. Assists; v. Royalties; vi. Subsequent proceeds; vii. Freight; viii. Loading, unloading and handling charges; ix. Insurance). Other information, which relates to and has bearing on the value should be declared by the exporter on his/ her Commercial Invoice and such particulars shall relate to the final amount pertaining to that transaction. f. The Commercial invoice presented for Customs clearance must be an exact repre- sentation of the transaction value. Full details and particulars of all factors relating to the sale which have direct or indirect influence on the transaction value must be reflected on the invoice. 6.0 PAYMENT OF CUSTOM TAXES After a declaration is made by the clearing agent, an assessment is raised and given to the client to pay the taxes due. 6.1 Payment in Installments Stepwise Instructions for the management of Memorandum of understanding MOUs for installment payments a. The process starts with the receipt of a taxpayer's requests by either Commissioner Customs Department or Commissioner General to enter an MOU with Uganda Reve- nue Authority to pay taxes in installments. b. On approval of the request, Commissioner Customs Department or Commissioner General shall forward it to Assistant Commissioner Compliance & Business Analysis (AC CBA) for implementation. c. On receipt of the request by AC-CBA, it shall be recorded and forwarded to Manager Compliance for processing. Supervisor arrears unit will in turn assign an officer, who will send the request to supervisor CBC to confirm taxes payable by preparing a work sheet (for those goods that are still with Customs) that is sent back to CBA. d. On receipt of the feedback from Supervisor document Processing Center, officer ar- rears shall prepare a payment schedule. The officer will draft a letter for Manager Compliance' signature in response to the taxpayer's request stating detailed terms and conditions for the payment in installments. e. When the tax payer accepts the terms and conditions, she/he shall be referred to Debt collection Unit (DCU) for execution of an MOU. Once she/he has entered an MOU, the officer arrears shall send a copy to supervisor systems and procedures for an m-account to be created upon which the principal tax shall be entered. f. An entry shall be captured by the clearing agent of the tax payer and the goods re- leased as directed by the authorizing officer (CCD /CG). g. Debt Collection Unit shall liaise with taxpayer to ensure that collections are as per schedule h. In case of a top-up, AC- CBA shall advise supervisor DPC to amend the entry in ques- tion so as to allow payments to be effected by the taxpayer. i. CBA advises taxpayer to lodge entry. M-account details communicated to taxpayer j. Once the payments have been completed, officer arrears shall pay entries into the Customs Management Information System and inform the revenue center and super- visor DPC k. After all payments have been received, officer arrears shall advise supervisor Systems and Procedures to suspend the M-account. 7.0 OBJECTION AND APPEALS 7.1 Appeals to the Commissioner A person affected directly by the decision or omission of the Commissioner or any officer on matters relating to Customs shall within 30days of the date of decision or omission lodge an application for review of that decision or omission. The Commissioner may extend the period of objection where there is good cause. The Commissioner shall respond to an objection within 30 days of receiving it or else be deemed to have made a decision allowing the application. 7.2 Steps taken a. When a client disagrees with a decision taken by an officer, he or she shall make a written objection to the officer handling the declaration. The officer shall study the merits of the case so as to take a decision. Where the officer finds the issues raised by the client credible, the officer shall proceed to settle the case and the case is closed. b. Where the Officer finds issues raised by the client as insufficient, the officer shall up- hold the decision by communicating in writing to the client. The client shall be advised in the same communication to appeal to the station head. Should the client choose to appeal, the station head shall receive the appeal and study the merits of the case. c. Where the station head finds the issues raised by the client credible, the officer shall be advised in writing to settle the case. The client will be notified in writing of this de- cision. Where the Station head finds issues raised by the client as insufficient, the de- cision shall be upheld. A written response shall be given to the client detailing reasons why it was upheld. The client shall also be advised to appeal. d. Should the client choose to appeal, the Manager shall receive the appeal and study the merits of the case. Where the Manager finds the issues raised by the client credi- ble, the officer shall be advised in writing to settle the case. The client will be notified in writing of this decision. e. Where the Manager finds issues raised by the client as insufficient, the decision shall be upheld. A written response shall be given to the client detailing reasons why it was upheld. The client shall also be advised to appeal. f. Should the client choose to appeal, the Division Head (Assistant Commissioner) shall receive the appeal and study the merits of the case. Where the Divisional Head finds the issues raised by the client credible, the officer shall be advised in writing to settle the case. The client will be notified in writing of this decision. g. Where the Divisional Head finds issues raised by the client as insufficient, the decision shall be upheld. A written response shall be given to the client detailing reasons why it was upheld. The client shall also be advised to appeal. h. Should the client choose to appeal, the Head of department (Commissioner) shall receive the appeal and study the merits of the case. Where the Head of department finds the issues raised by the client credible, the officer shall be advised in writing to settle the case. The client will be notified in writing of this decision. i. Where the Head of department finds issues raised by the client as insufficient, the de- cision shall be upheld. A written response shall be given to the client detailing reasons why it was upheld. The client shall also be advised to appeal. j. Should the client choose to appeal, the Commissioner General shall receive the ap- peal and study the merits of the case. The Commissioner General studies and con- siders the merits of the appeal in consultation with the CCD and CL&BA where nec- essary; Where the Commissioner General finds the issues raised by the client credible, the officer shall be advised in writing to settle the case. The client will be notified in writing of this decision. k. Where the resolution of an appeal requires consultation with other parties or organi- zations outside Uganda Revenue Authority, the CG may sanction for such consulta- tion prior to making a decision; Should the client choose to appeal, the case will be handled under the litigation process. l. Where the Commissioner General finds issues raised by the client as insufficient, the decision shall be upheld. A written response shall be given to the client detailing rea- sons why it was upheld. The client shall also be advised to appeal in Court. m. Should the client choose to appeal, the case will be handled under the litigation pro- cess. 7.3 Appeals to the Tax Appeals Tribunal A person dissatisfied with the decision of the Commissioner may appeal to the Tax Appeals Tribunal A person intending to lodge an appeal against the decision of the Commissioner shall do so within 45 days after being served with the decision and shall serve a copy of the appeal on the Commissioner. 8.0 CLEARANCE OF PASSENGERS AND BAGGAGE 8.1 Clearance of Passengers Embarking and disembarking passenger clearance is done only at Customs gazetted areas such as airports, seaports, landing sites and points of entry at land borders. All disembarking passengers must make a declaration to Customs through the Red or Green Channel according to the EAC-CMA. • Green Channel means "NOTHING TO DECLARE". • Red Channel means "SOMETHING TO DECLARE". 8.2 Passenger Baggage and Personal Effects Baggage and personal effects imported into Uganda by passengers may be declared and due taxes paid or are exempted from taxes in the manner specified below: (a) General For goods to be exempted from taxes, the general condition is that the goods must be the property of and in the company of the passenger. They should be for the personal or household use of the passenger and of such kinds and quantities as the Customs Officer may allow and in accordance with the specified restrictions. Any trade goods or goods for sale or disposal to other persons accompanying a passenger are cleared in the same manner as other imported goods on which duty is payable except that the customs val- ue shall not include air freight. (b) Duty Free Allowances for Passengers The following items may be imported as duty free items: a. Spirits (including liquors) or wine, not exceeding one litre or wine not exceeding two litres. b. Perfume and toilet water not exceeding in all one half litre, of which not more than a quarter may be perfume. c. Cigarettes, cigars, cheroots, cigarillos, tobacco and snuff not exceeding in all 250 grams in weight. The import duty free allowance shall be granted only to passengers who have attained the age of eighteen years. Goods up to the value of US$2000 for each traveler, other than the goods specified above, are granted exemption when imported by the traveler in his/her accompanied baggage or upon his person and declared to a proper officer provided the person has been outside Uganda for a period exceeding 24 hours. Cross border movements of currency and negotiable bearer instruments. Anti-Money Laundering (Amendment) Act 2017) A person- a. Entering or leaving the territory of Uganda and carrying cash or bearer negotiable instruments exceeding one thousand five hundred currency points or the equivalent value in a foreign currency; or b. Arranging for the transfer of cash or bearer negotiable instruments exceeding one thousand five hundred currency points or the equivalent value in a foreign currency into or out of the territory of Uganda by mail, shipping service or any other means, shall declare that amount to the Uganda Revenue Authority in the manner prescribed by the Minister by regulations. Regulation of Tobacco Products (Tobacco Control Act 2015) A person shall not import, distribute, manufacture, process, sell or offer for sale, or bring into the country a. An electronic delivery system including electronic vaporization device or cartridges with nicotine - containing liquid or other substances to be vaporized b. A water pipe tobacco delivery system including the water pipe device or the water pipe tobacco product or other substances to be used in the water pipe delivery sys- tem. c. A smokeless or flavored tobacco product. 9.0 POST PARCEL AND COURIER 9.1 Definition of a parcel A Post Parcel or postal article includes letter, postcard, packet, parcel, or other article whatsoever, in course of transmission by post. 9.2 Clearance of Post parcels There are a series of customs activities, processes, procedures, tasks and decisions that when taken in laid down sequence produce a desired result as indicated below; 9.3 Steps followed at Post Office A Post parcel or postal article includes letter, postcard packet, parcel or other article whatsoever, in course of transmission by post. a. The owner (client) produces the call note to post office staff at the post office Building. b. The parcel is retrieved and presented to customs by Post office staff. c. The parcel is then opened and the contents verified by the customs officer in the pres- ence of the owner of the Parcel. d. If the value of the goods in the Parcel is USD 50 above then Customs Officer at the Post Parcel office Captures an assessment notice (PP4) for the cargo in the parcel and issues an assessment of the taxes to the recipient. e. Assessed taxes are paid to URA authorized Bank (The clients are given 21 days within which to pay the taxes. If one fails to pay within stipulated time, the parcel may be transferred to customs warehouses in Nakawa where they may be auctioned to re- cover taxes. f. A receipt is issued to the client by the respective Bank g. The client presents the receipt to Customs office at Posta for release of the parcel. h. The officer confirms payment releases the goods to the client How the parcels postal article destined to the country side (Up country) are cleared out of customs controls. Under circumstances where it is not possible to have clients available for verification, parcels are verified at Kampala Main Post office by customs staff in presence of Post Uganda staff. Where the Value of the goods is USD 50 and above, then the customs officer at Post Office Kampala assesses the taxes payable and attaches the assessment on the Parcel Goods are handled over to Post Uganda for dispatch. Assessed Taxes are paid directly to the Bank instead of paying the taxes to Posta Ugan- da, this is done in the major towns like Jinja, Entebbe, Mbarara, Kabale, Mbale (among others) Any goods that are not collected are returned to Kampala Post Office and reconciled. A general list is made including unclaimed parcels from the Kampala Main Post Office and parcels transferred to Customs warehouses for public auction. 9.3.1 Post parcels exported for repair a) Upon return, a re-importation certificate will be required and VAT will be charged on repair costs. Where a new part is replaced all taxes will be applicable. b) For items where repair was done under warranty, a warranty certificate will be required and if valid, no taxes will be collected. 9.3.2 Post parcels destined for the countryside a. For upcountry parcels, you will be given an assessment for payment of taxes after which you can pick your parcel from a designated upcountry office. b. Items destined to the countryside are handled by Post office only. They are verified at Kampala Main Post Office by Customs staff in the presence of Posta Uganda staff in case you are not available to ascertain details of contents. c. Any goods that are not collected are returned to Kampala Post Office and reconciled. 9.4 Steps followed at DHL a. Cargo is transferred from airport to the head office under customs seal. b. Goods are accompanied by a copy of manifest with the details of the parcel in the truck. c. Seal is broken by customs, goods are sorted using a hand held scanner that is preset to capture all goods above USD 50. d. For goods with value of USD 50 and above, a tally sheet is populated and for goods of value USD 49, are handed over for delivery. e. Customs however has the mandate to verify the low values and confirm that they are indeed low values or under declared. If under declared, goods will be added onto the tally sheet of the goods to pay taxes. f. A client is given 21 days within which to pay for the Shipment and upon payment of taxes, goods are released. If a client fails to pay taxes, goods are put on Want of Entry g. For goods above USD 50, an IM4 is captured by the clearing agent for clients who have TINs, while for clients without TIN, customs captures PP4, after verification of the goods. h. All tax payments are made directly in the bank. i. Once payment of taxes is made, goods are then released and handed over to DHL for delivery. 9.5 Prohibitions or restrictions on goods transmission by post • All Prohibited goods are seized and retained according to Section 210 (a) of the East African Community Customs Management Act. E.g. Drugs, narcotics, pornographic items. • All Restricted goods are held until the relevant authorities accord conditions regu- lating their importation. E.g. NDA authorizes importation of all human drugs in the country. 9.6 Valuation of post parcels • The owner of goods is required to present the true invoice value of goods being ex- ported or imported on customs declaration forms provided. • The value and classification of the goods inside the parcel determine the taxes pay- able. • In the absence of the declarations, the value shall be determined in accordance with the 4th schedule of the East African Community Customs Management Act to deter- mine values of goods as alternative valuation methods are used (under GATT valua- tion methods) N.B Some clients intentionally under declare the values since they know that the threshold is USD 50 the client needs to know that the Customs officer is mandated to uplift the value or apply alternative valuation methods under GATT valuation methods in case the declared value does not match the contents in Parcel). 9.7 Treatment of gifts, donations or Personal effects All goods entering into the country are regarded as imports and liable to pay taxes, unless the value is below USD 50 or tax exempt by law. A list of exemptions is provided in the fifth scheduler of the Eat African Community Customs Management Act. The East African Community Customs Union common external tariff book contains the tax rates per item. What kind of tax is collected on imported goods in parcels? • Import Duty-based on the common external tariff and therefore varies with each item. • VAT - at 18 % • Excise duty- The rates vary depending on the product being imported (Refer to the rates under the Excise Tariff Amendment Act • Withholding Tax-form of refundable Income tax charged at the time of importation at a rate of 6% 10.0 WAREHOUSING OF GOODS AND MOTOR VEHICLES ON ARRIVAL a. When goods/motor vehicles arrive at the warehouse, they are received by Customs both physically and electronically. b. The transit documents from the boarder will always indicate the period within which the goods/motor vehicles are supposed to be delivered at the warehouse and this period must be adhered to. c. Where the stipulated time on the transit document has expired with no authenticated reason for delay, the in charge of the vessel would have committed an offence and liable to pay a penalty not exceeding $200. d. After electronic receipt (called validation), the documents are handed over to the clearing agent who should be dully appointed by the importer to clear the goods/ motor vehicle. e. The appointed clearing agent makes a declaration for either home use (direct pay- ment of taxes), warehousing, Transshipment, transit or export processing zones. f. The declaration must be done within 02 days of arrival at the warehouse of destina- tion. g. Where goods remain unentered within the stipulated time, then such goods if the customs officer so requires be removed at the expense of the agent of the vessel to a customs warehouse. h. Goods are verified in the presence of the Importer or the appointed agent or both to take account and determine the accuracy of the entry/declaration made. 10.1 Goods declared for warehousing Warehousing means that imported goods/motor vehicles are deposited for storage in a licensed bonded warehouse with the authority of the person in charge of that warehouse. A Warehouse keeper is the holder of a Customs license in respect to a bonded ware- house. What to note: a. Items are warehousable for a period of six months (180 days), with a period extension of 3months maximum, granted on request. This means that importer should request for the extension if it's required. b. The only exception to the above are new motor vehicles warehoused by approved motor assemblers and dealers, wines and spirits warehoused in bulk by licensed man- ufacturers of wines and spirits; and goods in a duty-free shop. c. Warehoused goods on permission can be; • Transferred to a new owner on payment of $10 • Re-exported to a foreign destination • Cleared (paid for) in part • Removed from one warehouse to another • Re-packaged • Allowed to do assembling/manufacturing in line with Sec.51 (1) (d) of the EACMA • Removed to an export Processing Zone • Temporarily removed for repairs or modification (in case of vehicles) where appli- cable. A security in form of bank draft covering the taxes payable is deposited with Customs d. The following goods are not warehousable: • Acids for trade and business; • Ammunition for trade and business; • Arms for trade and business; • Chalk; • Explosives; • Fireworks; • Dried fish; • Perishable goods & goods whose expiry date is less than 6months from the time of declaration; • Combustible or inflammable goods except petroleum products for storage in ap- proved places; • Matches other than safety matches and any other goods which the Commissioner Customs may gazette e. Once goods exceed the mandatory warehousing period, they are tagged for auction. However, the owner can redeem them by paying 1% of the value if they have not been advertised for sale or 3% of the value if they have been advertised. Perishable goods may be sold by either public auction or private treaty without notice at any time the time before their shelf life expires. f. Goods that are advertised in the category above are sold by Customs through a public auction. 11.0 GROUPAGE CARGO CLEARANCE PROCEDURE