- The people who craft these tax policies and the MPs who approve them drive 2016 Landcruisers bought off the taxes paid by taxpayers driving Ipsums manufactured when Zaire was still a country.
The government last year contracted a Swiss firm to conduct annual vehicle inspections. SGS, formerly Société Générale de Surveillance, has already set up some stations for the mandatory annual inspections.
Some disgruntled motorists have questioned the selection of the Swiss firm; others the remote and inconvenient location of the inspection centres. With some flexibility on all parties and some common sense, both problems can be cured easily.
Incentives are key. Any motorist with half a brain would like to keep their car in good nick. No one wants to wake up to a dead battery with a school drop off to make, or lose a fan belt on a rainy night in the middle of nowhere.
But no one wants to drive out of town, queue up for hours, and pay a tidy sum of money just to make the traffic police happy either.
SGS does not run automotive repair shops in Uganda to the best of my knowledge, yet that is where people go to have their cars fixed or serviced. The most logical thing is to make the inspection part of the routine visits to the garages, as happens in other countries.
SGS can charge a small fee to reputable garages, such as Hajj Omar Mandela’s City Oil, then set the standards, certify cars that pass the test, and maintain a searchable database that buyers of locally used cars can consult.
However, the bigger problem with the vehicle inspection scheme is that, in the case of Uganda, it is an exam designed to be failed, not to be passed. The average age of a car on Kampala’s streets is, by my rough estimate, 15 years. By the time many ‘new’ cars arrive in our used-car sales lots they have been out of production for many years in Japan, our main source of imports, and are simply being dumped.
Many people buying cars from the bond(ed) warehouse in Kampala are easily picking up a 1996, 1998 or 2001 model, with the odometer clocked backwards to give unsuspecting buyers some false sense of vitality. A 2006 model is considered ‘new’ while anything from 2009 onwards is up there with reusable space rockets.
The problem is simple: taxes, which come to just under 115 per cent of the landed cost of the car. A car under five years will pay tax of 50.5 per cent of its landed value. Cars between five and 10 years are slapped with an extra 35 per cent Environmental Levy, while anything older pays an engine-seizing, gasket-blowing 50 per cent!
The Environmental Levy was meant to reduce imports of older, less safe cars and it has worked. According to available data (see http://bit.ly/2nmylh0) imports of older cars dropped in 2015/16 after the levy rose; new car imports rose by a quarter.
The overall number of cars imported fell and while tax collections rose due to the higher tax band, so did the prices of used cars on the local market. In other words, the rich went for newer cars to avoid the environmental levy; they paid a little more money for a lot more car. The poor turned to the local used market or chose to hang onto their old cars, paying a lot more money for a lot less car.
The people who craft these tax policies and the MPs who approve them drive 2016 Landcruisers bought off the taxes paid by taxpayers driving Ipsums manufactured when Zaire was still a country.
Since taxes are charged on the value of the car, it makes sense for importers to bring much older cars – even with a 50 per cent environmental levy cars bought for a few hundred dollars are more affordable than newer ones.
Many of these cars cannot pass the SGS inspection however much you scrub and buff them. Most of the matatus and buses on our roads are only held together by rivets, the ingenuity of local mechanics, and the mercy of our gods.
All the SGS inspection exercise will do is enrich traffic police officers deployed to check for the certificates.
Eight Ugandans are killed on our roads every day. We can save lives by, among many other things, keeping junk vehicles off the roads. For that to happen, let’s ban the importation of cars older than 10 years, significantly cut taxes on new imports, and use the actual landed cost rather than the arbitrary rates used by the tax authorities.
Inspection works to keep – not to make – cars roadworthy. As long as you are importing junk you will have junk – and blood – on the roads.
Mr Kalinaki is a Ugandan journalist based in Nairobi. email@example.com &Twitter: @Kalinaki