Tax-Compliant Firms Get Special Treatment

Eleven companies have been chosen to receive preferential treatment when clearing their goods at customs, after they exhibited high levels of compliance in their tax obligations.

Under the Authorised Economic Operator (AEO) scheme, Uganda Revenue Authority (URA) said, these companies will now enjoy fast clearance of their goods through simplified procedures and reduced inspection. The companies include General Machinery Ltd, Victoria Pumps Ltd, Victoria Motors Ltd, Victoria Engineering Ltd, Victoria Equipment Ltd, Bemuga Forwarders Ltd, and DHL International (U) Ltd. These join ten others chosen last year for the same treatment.

This year, sixty-two companies had applied for the recognition, but URA said the rest are still being monitored before they can be granted AEO status Speaking to representatives of the successful companies at URA headquarters, Nakawa on Monday, Commissioner General Allen Kagina said: “We are celebrating compliance. The beginning was not so exciting 22 years [back] the change is very obvious [now].”

“Our next stage is anticipating our clients’ needs and designing the solutions to them. We are moving from being responsive to being anticipatory. The next phase will see us coming out of our offices to your businesses to understand them,” Kagina added.

An AEO is a company or individual highly trusted by the revenue body – that even with less surveillance, such a company is expected to assess itself and willfully pay taxes. At the border points, customs officials are not obliged to over-scrutinise goods of such a company.

AEO is a regional trade facilitation programme recommended by the World Customs Organization (WCO) to ease trade and customs clearance for tax-compliant importers and exporters. URA, supported by TradeMark East Africa, started piloting the scheme last year, in a bid to boost tax compliance. Companies such as Toyota Uganda, Unifreight Cargo, DHL Courier, and BATU, among others, were used in the pilot phase.

URA Customs Commissioner Richard Kamajugo described the scheme as a huge success.

“At first, we thought the more we controlled, the more we got the money but we were wrong. Actually, the more we eased [controls], the more money we got,” Kamajugo said.

To be accredited as an AEO, a company applies to URA and is subjected to rigorous checks – audits of its income returns and tax returns.

“We want to have that confidence in you that even when we do not follow you, you will meet your tax obligations,” Kamajugo said.

The company gains some leverage in time saved owing to delays in clearing goods at customs. In a testimonial statement, the Mulwana group, whose Jesa franchise was among the pilot companies, said ever since they were awarded an AEO status last year, they have been able to reduce days spent at the border from four to one. This saves the company Shs 10m per month.

URA said it was engaging revenue bodies in Kenya, Tanzania, and Rwanda to recognise companies that hold the AEO status in Uganda. This would guarantee more benefits to the holder company, Kamajugo said. To be eligible, Kamajugo said, one should be involved in international trade, have a good compliance history, be financially sound, install and use customs automated systems like e-tax, and implement the AEO compliance programme.

Source : The Observer

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