Govt statement on foreign petty traders

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Introduction
Government has received several complaints from the business community concerning a number of issues that affect their operations. The complaints include;
1. The influx of foreigners in petty trade which is drivingcitizens out of business
2. Delays in clearance of goods by URA caused by valuation at the Centralized Data Processing Center (DPC) and regular system failure of Asycuda World Clearing System
3. Delays in clearance of goods by UNBS and testing services
4. Unfair treatment of traders (tenants) by the landlords in Kampala

1.0 Foreigners in Petty Trade

Government is equally concerned with the influx of foreigners in petty trade and a number of interventions have been made to address the matter.

My Ministry presented the issue before Cabinet after realizing that there is no law that prevents foreigners from engaging in petty trade. Cabinet constituted a Subcommittee to study this matter and come up with a national policy objective to guide trade by Non-Citizens. The subcommittee has finalized its report that will be presented to cabinet.

Some of the highlights in the draft include;

• What is the actual definition of a foreigner?
• Restricting foreigners from dealing in certain categories of goods in some areas
• Controlling the nature of distribution
• Increasing the threshold from the current requirement of USD 100,000 to agreed threshold in the Investment Code Act

2.0 Delays in clearance of goods by URA caused by valuation at the Centralized Data Processing Center (DPC) and ASYCUDA World Clearance System

On 24th February 2017, URA introduced a harmonized tax collection system by setting up a Central Data Processing Centre. This facility is a trade facilitation initiativewith the aim of;
• Harmonizing customs valuation/duty collection at all URA regions
• Shortening the Customs declaration processing time
• Classification of all goods to ensure a level playing field for all the traders and to ensure that all operations are closely monitored to enhance integrity and Quick turnaround of the customs clearance

However, traders have complained that the DPC System has led to increased tax values on goods and due to this increase; they have found it difficult to clear their goods out of the customs area.

2.1 What is the DPC
The DPC is a centralized document processing hub where all documentary assessment and compliance check functions for all Customs declarations is done.
The DPC is located at the URA Headquarters in Nakawa and has technical personnel that manage clearance of goods on a 24 hour basis.
The function of physical verification of goods takes place at the entry points or in the customs bonded warehouses as the client may please.
Hence valuation and classification of goods in the DPC is based on the descriptive verification accounts that are attached on the declarations electronically by the customs officers at the place of verification.
2.2 Benefits of the DPC
• Provide quick and efficient service on a 24/7 basis.
• Shorten Customs declaration processing time by receiving declarations online and processing them relying on the scanned attached documents on a 24/7 work arrangement.
• Minimizing staff, clearing agent and trader direct interferences to enhance independency and separation of roles in the customs clearance process
• Improve the management of the declaration processing by ensuring uniform application of tariffs and valuation for goods
• Enhance the clearance processes by reducing the need for physical documents in the clearance processes.
• Enhanced Specialization and professionalism (in handling certain types of cargo)
• Enhance productivity of the customs staff so as to increase the clearance speed

2.3 The Customs Help Tool
To support the implementation of the DPC, Customs created an easy and convenient communication tool between Customs and its different Stakeholders.
It is an easy and user friendly web-based application that can be accessed onlinefrom anywhere as long as the user has internet connection.

URA has also increased the number of staffs that receive the issues and ensure they are resolved in the shortest time possible.
A help desk has also been created inside the DPC to further support this function. We encourage all the clients to use the help tool as the only channel for receiving and managing the complaints that may be raised.

2.4 Valuation of Goods
As a result of DPC implementation, harmonization of values has been created across the country where by some importers who used to get away with perhaps low values in certain stations now can no longer do so. This is good for business because it creates fairness across the board.

2.5 Interventions by URA to address the unnecessary delays in clearance of goods
URA has undertaken the following immediate and short term actions to address delays;
• Upgraded our servers for Asycuda a week ago and this has increased the speed of processing declarations.
• Increased the number of users under the Asycuda License from 1000 to 2000 users. This was done effective Tuesday 18thApril 2017.
• URA with the support of NITA-U has been granted a dedicated internet line by the Uganda Internet Exchange. This will ensure uninterrupted internet services.
• In the long term, URA is working with NITA-U to increase the band width.

3.0 Delays in clearance of Goods by UNBS
The business community has complained about the delays in clearance of UNBS caused by the Pre-shipment Verification of Conformity (PVoC) programme.

Implementation of the PVoC program started in June 2013 to facilitate the inspection of goods and used vehicles against compulsory Uganda Standards. Once goods are inspected in the country of origin by service providers contracted by UNBS, a Certificate of Conformity (COC) is issued. The verification of the COC at the entry points in Uganda takes no longer than four (4) hours.

In the absence of a COC, destination inspection takes place which includes: payment of a surcharge (penalty); physical inspection of the consignment; collection and testing of samples at the UNBS Laboratories in Nakawa. The delays mentioned above are experienced by traders who chose to go through destination inspection instead of the PVoC program.

UNBS has undertaken the following initiatives to ensure that traders are familiar with the programme;

i. Awareness on PVoC: Communication on PVoC is a continuous process with traders. The collaboration with URA has improved the intervention of UNBS on high risk goods.
ii. UNBS will continue to carry out sensitization and encourage compliance to reduce challenges.

Short term Interventions
 Implementation of the E-Portal, which allows for inspection application on-line, has been progressing steadily. This portal is linked to Asycuda World and has helped in faster clearance of goods.

 The procedure for Release-Under-Seal (RUS) to importers own storage space outside the Customs area is being implemented. It is available only after paying the penalty (in the absence of a valid COC). The storage space is sealed until the inspection procedure is completed. With this procedure, the traders are able to avoid demurrage charges at customs.

Long term interventions

Provided the budget allocations for financial year 2017/18 are released, it is the intention of UNBS to boost the staff numbers primarily at Malaba and Busia. This will allow for inspections to be carried out on a 24hr cycle.

3.1 Delays in Testing Services:
Interventions
 UNBS begun the implementation of a Laboratory Information Management System (LIMS) in October 2016, which has improved the monitoring of turn-around time for testing services. Clients are able to get information on the status of samples and are informed when the analysis is concluded.

 Samples from the Imports Inspection Department are given first priority at the labs.
 The Recognition of Labs Certification scheme also begun in November 2016. The recognized labs issue results that can be used for the clearance of goods as well as certification services. The list of labs that have been recognized by UNBS include the following;
Laboratory Services:
o SMAT Technical Services Ltd – Civil Engineering Materials analysis
o Chemiphar Uganda Ltd – Chemistry and Microbiology analysis
o Uganda Industrial Research Institute – Chemistry and Microbiology analysis
o St. Michael Food Laboratory and Consultancy – Microbiology analysis

Factory Laboratories:

o Reco Industries – Physio-chemical and Microbiology analysis
o Roofings Ltd – Physical and Chemical analysis
This is in the effort of improving the laboratory testing capacity in Uganda. The private sector is encouraged to invest in this area and improve the services available.

4. Unfair treatment of traders (tenants) by the landlords in Kampala

The Ministry of Trade, Industry and Cooperatives has engaged the Ministry of Lands, Housing and Urban Development to fast track the development of a regulation for Landlords and Tenant relationships.
When the regulation is in place, it will sort out the current harassment and mistreatment of tenants by landlords.

The Ministry if also following up with the relevant Government agencies to put a stop on the practice by landlords to charge tenants in US dollars. They should instead charge them in Ugandan shillings.

Amelia Kyambadde (MP)

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