Effect of Import Taxes Management on the Demand of Second Hand Imported Cars in Uganda. Case Study: Jambo Automart Ltd

Abstract

The study was set to examine the effect of import taxes management on the demand for imported cars in jambo automart limited. The study objectives were to determine the effect of import duties on the demand for imported cars in jambo automart limited , to find out the effect of environmental levies on the demand for imported cars in jambo automart limited and to establish the effect of insurance fees on the demand for imported cars in jambo automat limited

A case study research design was used where both quantitative and qualitative methods of data collection and analysis was also used. Purposive and simple random sampling was used to get a representative sample fifty. Thematic content analysis was used as the main analysis strategy. Key findings were transformed into themes for analysis and presentation of data.

The study found out that majority (62%) of the respondents agreed that import duties has negatively affected demand for imported cars. Also majority of respondents 56% indicated environmental levies increases the prices of cars hence discourage the purchase of such cars. The findings also showed that most respondents (73.1 %) were not satisfied with insurance taxes where at great extent, they disagree with the statement. The researcher concluded that, import duties, environmental levies and insurance fees negatively affected the demand for imported whereby all these taxes, increase on costs management costs and control hence reduced demand for imported cars.

The researcher recommended that the government also should try to reduce on the various import taxes that are levied on the used vehicles. The government should also try to revise the tax regime and come up with a single tax rate that incorporates all the taxes that are levied. This will help to reduce on the bureaucracies and paper work that is involved in the process of clearing the vehicles and make the process simpler. Though URA is rolling out the ASCUDA system, there still exist a lot of gaps existing in tax administration in Uganda that need to be fused.

From an environmental point of view, it is quite alarming that despite the introduction of the environmental levy, the majority of the vehicles that are imported into the country exceed the recommended 8 years and this raises concern over the uneconomical fuel consumption, high levels of carbon emissions which is further worsening the prevailing environmental crises like global warming, desertification and the greenhouse effect. The importation of very old models of cars has turned Uganda into a disposal ground for the used cars especially from Asia in countries like Japan and United Arab Emirates. Therefore the government should come up with strict measures to reduce the importation of very old models of cars into the country.

Observing the trend of vehicles that are being imported into the country, it has been observed that there is an increase in the number of vehicle that are being imported into the country for use in the agricultural sector and since agriculture is the backbone of the economy, a tax waiver should also be placed for the vehicles meant to be used in the agricultural sector and this will go a long way in boasting investment in agricultural value addition.

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