The Process of calculating the total cost of a car when imported to Uganda

Compiled by: Beebwa Fidel
BFS: Uganda
BFS ID: 307076
E-mail: beebwafb@gmail.com

Introduction

To you all BE FORWARD Supporters Uganda Group, I greet you all and thank you for the work well done to promote our group and BE FORWARD Business in Uganda. I encourage you to keep up the spirit, the more this business grows, the more benefits we get as BE FORWARD Supporters.

We have noticed on several occasions that some members of our group keep asking the total cost of cars they want to buy. It’s from this reason that I came up with steps to show the members how to get the total cost of the car being imported. This is important as we interact with our customers who want to know this important information that help them make informed decisions.

Dear Supporters, be with me all the way through this process.

Let us begin by explaining some important Abbreviations used in this process:

  • FOB – This stands for Free On Board. This means the actual price of the car before additional cost is added, such as Transportation, Insurance and Inspection, etc.
  • CIF – This stands for Cost, Insurance and Freight. It means the total cost of the car after adding other costs to the FOB. So it’s the total of FOB, Insurance, Shipment and transportation, inspection and any other costs that may be added. For our case in Uganda, the CIF could be either up to Mombasa, Malaba or Kampala depending on the delivery place you select.
  • URA – This stands for Uganda Revenue Authority.
  • BFS – BE FORWARD Supporters
  • BFS ID – This stands for BE FORWARD Supporters Identity.
  • TT – Telegraphic Transfer

STEP 1

We will start our process by selecting a car of our choice on the BE FORWARD website http://www.beforward.jp/

At this point the price indicated is FOB. In this example the FOB price is USD 4,633

In selecting a car of your choice, you have to consider the year of manufacture. In Uganda the year of manufacture is one of the components that determine how much tax to be levied on a car. Some newer vehicles may be levied higher taxes in total than older ones because of the fact that URA imposes taxes according to the value of vehicle. At the same time, there is a tax levied on older cars called Environmental Levy. If you purchase a car that is above 5 years from the year of manufacture, environmental levy will be applied. If it’s 5 years and below, no charge will be applied.

Other important features that are necessary in calculating tax are as follows:

Make
Model
Year of Manufacture
Engine Capacity
Model Code
Chassis Number
Fuel type

In our case here:

Make – Toyota
Model – Harrier
Year of Manufacture – 2005
Engine Capacity – 2400cc
Model Code – CBA-ACU30W
Chassis Number – ACU30-0036414
Fuel type – Petrol

I have circled these features in the picture above.

 

STEP 2

Let’s select the destination of the car or point of delivery.

Destination Country – Uganda
Delivery Point – Kampala
Here you have to select Pre- Inspection also. In Uganda it’s now compulsory to import a car after inspection, or else you will be slapped a heavy penalty. On the BE FORWARD web, it’s optional but make sure you include Inspection to avoid a penalty.

It’s at this point that we determine the CIF of the car.

In our example, the CIF is USD 7,046. This is the amount that appears on the invoice from BE FORWARD.

But remember, as a BE FORWARD Supporter, you have advantage of using your BFS ID and other discount coupons to get discounts and reduction on the CIF price.

 

This is the amount that is sent to BE FORWARD Japan.
The process of sending money to BE FORWARD.JP starts with going to the bank where you hold an account. The dollar exchange rate will depend on that bank’s prevailing rates at that time. Different banks have different dollar exchange rates. However you can get the exchange rates online using currency converter.

You can use this link: http://www.xe.com/currencycharts/?from=USD&to=UGX

For example this currency converter shows that the current exchange rate is 1 USD=3,625.68 Uganda Shillings.

If we put our CIF in the currency converter, it will be converted to Uganda Shillings, which is the amount we need to pay for the car at BE FORWARD Japan. So, 3,625.68 x 6,951 = 25,202,131Ug Shs.  This is the total amount on the TT we need to send to Japan.  However there are bank charges and remittance charges, which can be confirmed from the bank from where the transaction will be done.

Therefore USD 6,951 = 25,202,131.90 Ug Shs. This is the CIF in Uganda Shillings

However it should be emphasized that remittance fee and bank charges should be paid by the purchaser and the money must be transferred to BE FORWARD in Dollars and not to be converted to Japanese Yen.

 

STEP 3

At this stage, we should be using the CIF price indicated on the invoice from BE FORWARD  to calculate the taxes to be paid. The CIF should be filled in the URA tax calculator to get the tax assessment. But in Uganda, we do not use the invoice value. URA came up with a list, which has specifications of all cars and their indicative CIF values. This was done to avoid people who used to get undervalued invoices from Japan and used to under declare the vehicle’s real purchase cost hence paying less taxes.

We check on the URA indicative list to get the CIF of the car that has the same specifications with our selected car. The indicative list can be obtained from URA web portal https://www.ura.go.ug/

  • From the URA list, the indicative CIF of our selected Harrier is USD 3,767.80.
  • URA has its own monthly pre-determined USD exchange rates.
  • From the table below, the URA exchange rate is 3,612.34.

So we shall use the circled indicative CIF value above to fill in the URA tax calculator.

 

URA Motor Vehicle Calculator

Disclaimer: The purpose of this calculator is to give you an indication of taxes payable for USED motor vehicles. These values are dependent on factors that may vary from time to time, such as the CIF (which is as per the Used Motor Vehicles Indicative Value Guide, available under Tax Topics A-Z under section M), current exchange rates, and tax rates. Payments for used vehicles should only be made after a declaration for your import has been made by your appointed clearing agent.

 

STEP 4

The next stage is the determination of other costs:
There is a Registration Number plate, which at present in Uganda it’s 137,000/=
There are clearing charges (different clearing agents charge differently but averagely it is 250,000/=

So other costs totalling to 387,000/=

Thank you.

For any questions, suggestions and additions, kindly share with us.

 

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2 thoughts on “The Process of calculating the total cost of a car when imported to Uganda

  1. barasa protus

    wow brother fidel, well composed article, keep it up , i believe many are going to iquiped with the knowledge given

    Reply

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