3 min read
Buying a taxi in Uganda involves more than just the purchase price of the vehicle. Potential buyers need to be aware of several taxes and levies that significantly impact the total cost of ownership. Understanding these taxes will help you budget more accurately and avoid unexpected expenses. Here’s a breakdown of the taxes you should consider:
Import Duty: A key tax when bringing a taxi into Uganda is the import duty, which is set at 20% of the car’s value. This tax is calculated based on the price of the car, including its cost of importation, insurance, and transportation costs.
Value Added Tax (VAT): VAT is charged at 18% of the total value of the vehicle. Like import duty, VAT is calculated on the combined cost of the car’s importation, insurance, and transportation.
Withholding Tax: This tax is set at 6% of the total value of the vehicle. It is important to factor this into your budget, as it adds to the overall expense of acquiring a taxi.
Infrastructure Levy: An additional 1.5% is levied for infrastructure development, which also applies to the total value of the vehicle.
Environmental Levy: For taxi’s manufactured more than nine years ago, an environmental levy is applicable. This levy can be either 20% or 50% of the vehicle’s value, depending on specific regulations.
To illustrate how these taxes impact the cost of a taxi, let’s consider an example of a (Toyota Hayasi) mostly known as drone taxi manufactured in 2010. According to the Uganda Revenue Authority (URA) website, the customs charge for such a vehicle is USD 7,605.15.
First, you’ll need to convert this amount into Uganda Shillings. Using the current exchange rate of 1 USD = 3,722.64 UGX:
7,605.15 * 3722.64 = 28,311,236/ Ush
• Import duty 25%
0.25 * 28,311,236 = 7,077,808/ Ush
• VAT 18%
0.18 * (28,311,236 + 7,077,808) =6,370,028/ Ush
• Withholding tax 6%
0.06 * 28, 311, 236 = 1,698,675/ Ush
• Infrastructure Levy 1.5%
• 0.015 * 28, 311, 236 = 424,669/ Ush
Since it was manufactured more than nine months back it will have to pay
• Environmental levy of 50% (depending on the vehicle’s age)
0.5 * 28, 311, 236 = 14,155,669/ Ush
These taxes are based on the sum of the car’s value, including importation costs, insurance, and transportation. Keep in mind that you wilI have to pay Registration fees, Stamp duty and Form fees shillings 1,500,000/ + 35,000/ + 18,000/ respectively. Therefore the whole sum of tax paid on the Drone taxi will be 31,279,798/ Ush .
To get the latest customs duties and tax information, visit the URA website at www.ura.co.ug. The website provides updated figures and additional guidance for calculating taxes on used vehicles.
By keeping these factors in mind, you can better prepare for the financial commitment involved in purchasing a taxi and ensure compliance with all relevant regulations.
Report Compiled by Amos Ssemuwemba