URA Tower. Inset is Robert Kalumba, the Assistant Commissioner, Public and Corporate Affairs, URA.
The Uganda Revenue Authority (URA) has noted with concern the increasing abuse of the groupage or consolidated cargo clearance process by fraudulent individuals known as container leaders.
These unscrupulous actors exploit unsuspecting traders, inflate tax charges, and undermine government revenue.
Groupage cargo refers to goods belonging to different importers that are shipped together in one container. This practice is legitimate, provided that the consolidator properly declares and transfers each importer’s goods to their respective name and Tax Identification Number (TIN) upon arrival at a bonded warehouse in Uganda. Here every importer gets their individual house bill and pays their taxes directly to URA through a process known as self-clearance. Groupage clearance refers to a malpractice where individuals commonly calling themselves “container leaders fraudulently present consolidated cargo belonging to multiple traders as their own and clear it under their personal name or TIN. This practice is illegal, exploitative, and punishable by law. URA has therefore banned it with immediate effect.
Common Malpractices by Container Leaders
1. Collecting money from importers under the guise of tax payments and failing to remit the full amount to URA
2. Overcharging traders by inflating tax amounts beyond URA’s assessments, which has driven many out of business.
3. Fraudulently clearing cargo under their own name and TIN, instead of transferring it to the rightful importers, in order to illegally claim input tax credits.
4. Submitting falsified documents such as invoices, packing lists, and sales agreements to evade taxes.
5. Illegally claiming VAT refunds on behalf of the actual importers.
6. Misleading small importers by discouraging self-clearance with false claims that it is more expensive and time-consuming. Through these fraudulent schemes and propaganda, these “container leaders” or “groupage clearers” have enriched themselves at the expense of small importers and national revenue.
URA strongly condemns these illegal acts and their perpetrators. Several offenders have already been arrested, charged in court, and are facing prosecution.
Guidelines for compliance To simplify compliance and protect traders, URA advises as follows:
1. For Legitimate Cargo Consolidators: Provide a master bill for all cargo in the container. Issue individual house bills to each importer. Transfer each cargo to the correct importer’s name and TIN upon arrival.
2. For Importers: Provide genuine commercial documents for your goods.
URA encourages all stakeholders to adhere to these guidelines to avoid non-compliance, which may lead to legal repercussions under customs laws. Cargo consolidation itself is not banned; traders can still jointly transport goods in one container.
However, the fraudulent practice of clearing such cargo under one name or TIN, referred to as Groupage Cargo Clearance, is now banned.
“URA reaffirms its commitment to facilitating the efficient clearance of all imported cargo, regardless of value or quantity. Small importers using joint containers are urged to insist on receiving individual house bills from consolidators and to pay their taxes directly to URA in line with the procedure outlined above,” reads part of a statement issued by the URA.
By following these steps, your goods can be cleared within 48 hours, and you will only pay what you legally owe, free from inflated charges imposed by unauthorized middlemen.
What’s being done?
The Uganda Revenue Authority has recently faced concerns and misconceptions regarding its policies on streamlining groupage/consolidated cargo clearance.
In the question and answer provided below, URA’s Ag. Assistant Commissioner, Public and Corporate Affairs, Robert Kalumba, explains interventions in this area.
Question: Does the new URA tax directive ban consolidated container imports and cripple small businesses?
Answer: This is not true. What is banned are container leaders presenting goods (grouped in one shipment) although belonging to multiple traders and proceeding to fraudulently clear the entire shipment under their own name or TIN.
Question: Do “container leaders” fairly distribute the tax burden among the traders of cargo in a single container and offer flexible payment plans?
Answer: This is very inaccurate. To the contrary, many importers, especially small traders, have been concerned with container leaders because of their exploitative behaviors, for instance, collecting money from importers under the pretext of paying taxes and failing to remit the full amount to URA. Overcharging traders by inflating tax amounts beyond what is assessed by URA, thereby pushing so many small traders out of business. Clearing cargo under their own name and TIN instead of transferring goods to rightful importers in order to benefit from their input tax credits. Claiming input tax credits and VAT refunds meant for the actual importers, etc.
Question: Does URA offer flexible payment plans for traders?
Answer: As a trade facilitator, URA supports small traders in many ways—for example, there are storage facilities for cargo imported by traders who do not have enough money to immediately pay taxes for their goods. In addition, URA allows partial clearance of goods by importers, including small traders, and also facilitates installment payment of taxes assessed. All these provide better and more flexible tax payment opportunities for our traders.
Question: Will URA’s policy on consolidated cargo push small traders out of business?
Answer: No, this policy aims to support legitimate trade. It supports all traders, including small traders. Like stated earlier, it only rightly hits container leaders presenting goods (grouped in one shipment) although belonging to multiple traders and proceeding to fraudulently clear the entire shipment under their own name or TIN. Cargo for small traders shall continue to be grouped and shipped into a country in single containers and will be required to be cleared under individual importers own names or TINs.
Question: Is there a need for consensus on tax management for shared containers?
Answer: The URA’s approach promotes transparency and fairness by requiring each trader to pay taxes for their goods under their own name and TIN. Under this arrangement everybody wins: the importer is not exploited by container leaders through overcharging and inflating tax amounts more than actually assessed by URA, and URA collects for the government a fair share in the form of taxes payable.
In brief, the procedure allows consolidated cargo to be shipped into the country to a customs bonded warehouse, and upon arrival the following is done: i. Consolidated cargo is verified by URA in the presence of individual importers and legitimate consolidators. ii. Legitimate consolidators transfer the cargo into individual importer names and TINs. iii. Each importer pays taxes for their own goods. URA releases goods to the actual importer or duly.
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