FAQS CUSTOMS VALUATION & DOCUMENT PROCESSING CENTRE

 

 

 

 

 

 

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In general, Customs Value is the value of goods to levy ad valorem duties of Customs. Ad valorem duties are duties that are calculated as a percentage of the value of the goods; for example, import duty is 25% of Customs value whereas Specific duties are duties, taxes, or fees levied based on specific measures of goods such as number, weight, volume, area, capacity, etc. Here, a specific sum is imposed on each article regardless of its value, e.g. UGX1,000 per liter of fuel as Tax.

 

Today, all Customs administrations of the WTO Members value imported goods in terms of the provisions of the WTO Agreement on Customs Valuation (ACV), which was adopted in 1994. The ACV establishes a Customs valuation system that primarily bases the Customs value on the transaction value of imported goods, which is the price actually paid or payable for the goods when sold for export to the country of importation, plus certain adjustments of costs and charges.
Non-WTO Members are not obliged to apply the provisions of the ACV. A few rare countries still apply the provisions of the Convention on the Valuation of Goods of 1953 also known as the Brussels Definition of Value (BDV) for customs purposes.
The ACV is published in the WCO Compendium on Customs Valuation and is also available via the following link: https://www.wto.org/english/docs_e/legal_e/legal_e.htm#artvii
The legal basis is the Agreement on Customs Valuation (ACV) or simply the Agreement. Domesticated in Section 122 of the East African Community Customs Management Act 2004 and the Fourth Schedule to the Act.

 

The ACV provides for six methods of valuation to be applied in the following sequential order except for methods 4 and 5 where the law provides for reversal of the order of application on request by the importer.
The transaction value method;
The transaction value of identical goods;
The transaction value of similar goods;
Deductive value method;
Computed value method, and;
Fallback method.
Only when the method specified earlier in the sequence cannot be applied, can recourse be taken to the next method in the sequence.
It should be noted that the primary basis for valuing imported goods is the transaction value method which has to be applied to the greatest extent possible.

Transaction value is the price actually paid or payable for the goods when sold for export to the country of importation adjusted in accordance with provisions of Article 8 to the extent that such costs have been incurred but not been included in the price actually paid or payable for the imported goods.

 

The price actually paid or payable is the total payment made or to be made by the buyer to or for the benefit of the seller for the imported goods. It includes a settlement by the buyer whether in whole or in part, of a debt owed by the seller and other indirect payment for the seller by the buyer.
In principle, the price actually paid or payable shall not include the following charges or costs, provided that they are distinguished from the price actually paid or payable for the imported goods:
1) Charges for construction, erection, assembly, maintenance, or technical assistance undertaken after importation of the imported goods;
2) Transportation costs after importation;
3) Duties and taxes imposed on imported goods in Uganda.
However, if the price actually paid or payable will not be able to be grasped by the whole amount including the above costs, then it shall be the total amount including such costs.

That there are no restrictions as to the disposal or use of the goods by the buyer
That the sale is not subject to a condition or consideration for which a value cannot be determined concerning the goods being valued.
That no part of the proceeds of any subsequent resale accrues directly or indirectly to the seller unless an appropriate adjustment can be made under Article 8.
If the buyer and the seller are not related or where they are related, the relationship did not influence the price.

– Free consignments (Examples: gifts, samples, promotional items);
– Goods imported on consignment (Examples: goods imported by an assignee for sale by auction which is held in Uganda, goods imported for sale by auction which is held in Customs bonded area and there is no sale between an exporter and an importer for the goods);
– Goods imported under a hire or leasing contract;
– Goods imported by branches that are not separate legal entities;
– Goods imported by a person or a company who does not have its domicile, residence, headquarters, branch, office, or place of business or equivalent establishment in Uganda (hereinafter referred to as “non-resident”) as a buyer by sale and arrived at Uganda;
Goods imported by a non-resident to sell in Uganda after importation (Example: Goods imported by a non-resident and declared by using Customs manager system under Article 95 of Customs Law, or person or company in Uganda as a proxy of a non-resident for sale through e-commerce website which is run by a resident of Uganda after importation (hereinafter referred to as “e-commerce website”).

Documentation is divided into four categories Commercial Documents, Transport Documents, Financial Documents, and Regulatory Documents.
• Commercial documents
Purchase order
Pro forma invoice
Sales contracts
Packing list.
Commercial invoice
Receipt
• Transport Documents,
Export documents
Bill of lading
Freight Invoice
Freight debit note
Insurance Certificate
Insurance debit note
• Financial Documents.
Proof of payments. (TT, Bank guarantee, Bank draft, Cash receipt, etc…)
Financial credit instruments
• Regulatory Documents
Transit documents
Certificate of Origin
Permits/Certificates of Analysis
Fumigation Certificates
Phytosanitary Certificate

This is Article 2 of the Agreement on Customs Valuation
• Basis shall be a previously accepted transaction value of goods identical to the ones being valued.
• Identical goods are goods that are the same in all respects including physical characteristics, quality & reputation.
• Exported at about the same time as goods being valued.
• In substantially the same quantities and at the same commercial levels.

This is Article 3 of the Agreement on Customs Valuation
• Basis shall be a previously accepted transaction value of goods similar to the ones being valued.
• Similar goods are goods that although not alike in all respects, have like characteristics and component materials which enable them to perform the same functions and to be commercially interchangeable.
• Exported at about the same time as goods being valued
• If not in substantially the same quantities and at the same commercial level, adjust for commercial level or quantity level factors or for both.
• Goods produced by a different producer shall be considered only when there are no similar goods produced by the same person.

 

This is Article 5 of the Agreement on Customs Valuation. In case the Customs value cannot be determined by using the Primary method or the Identical or Similar goods value method, then the Deductive value method can be used for Customs valuation purposes.
The Customs value shall be the price deducting certain expenses from the domestic selling price which is at the first commercial level after importation in Uganda of the imported goods or identical or similar goods (which should be limited produced in the same country of the imported goods), at or within a certain period of import declaration day, to a person/company as a seller in Uganda who is not related to the buyer in Uganda.

In the case of using “the Deductive value method”, the following expenses shall be deducted from the domestic selling price:
• Either the commissions usually paid or the additions usually made for profit and general expenses in connection with sales in Uganda of imported goods of the same class or kind;
• The usual transportation and insurance costs and associated expenses incurred within Uganda;
• The Customs duties and other taxes imposed on the imported goods in Uganda. Deductions for either commissions or profits and general expenses, cost of transportation & insurance after importation, Customs duties, and local taxes are payable because of the sale of the goods in the country of import.

This is (Article 6 of the Agreement on Customs Valuation)
The Computed value method” is to calculate the Customs value based on the cost of producing imported goods by adding the followings: the value or costs for materials, fabrication & labor an amount for profit, and general expenses equal to that usually reflected in sales of goods of the same class or kind as the imported goods being valued which are made by producers in the country of exportation for export to Uganda, transportation costs, and other associated expenses to a port of importation.
8.1 In which case the Computed value method can be applied?
In case the Customs value cannot be determined by using the previous methods
Please kindly note that “the Computed value method” is to be applied only in the case that the imported goods arrive in Uganda based on the transaction between the importer (who is located in Uganda) and the manufacturer of the imported goods.
Therefore, it is not possible to apply for the case, for example, a non-resident purchases the goods from the manufacturer or a transaction has occurred between the non-residents.

This is (Article 7 of the Agreement on Customs Valuation). the basis shall be;
a) The price calculated with a reasonable adjustment of Articles 4 to 4-3 (Paragraph 1, Article 1-12, Cabinet Order for Enforcement of Customs Tariff Law)
b) In case that a) is not applicable, the price calculated based on a method set by the Director-General of the Customs, which is complied with Article VII of the General Agreement on Tariffs and Trade 1994 and Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (WTO Valuation Agreement) (Paragraph 2, Article 1-12 of the Cabinet Order for the Enforcement of Customs Tariff Law).
For example, if the domestic sale had been made on 120 days after the import declaration, not within 90 days, and there is no other satisfactory domestic selling price, the domestic selling price of the 120 days can be used to calculate the Customs value.

By definition, the Customs value does not equate to the invoice of the goods. In practice, it may be represented by the invoice price provided that all the provisions of the ACV are met and that it includes all the elements considered to be part of the Customs value.

 

It depends on the national law of the importing country. As per the ACV, in framing its legislation, each Member shall provide for the inclusion or the exclusion from the customs value of the cost of transport of the imported goods to the port or place of importation. In Uganda, Freight is part of the customs value for goods imported by sea and road from other countries other than the East African Community. Goods imported by air only consider cost and insurance as Customs Value

For goods that arrive by sea and Road, the basis shall be Cost Insurance and Freight (CIF) up to the port of discharge (Mombasa or Dar es Salaam)
Cost -This is the invoice value of the goods
Freight -This is sea/marine freight charges from the port of dispatch to the port of discharge
Insurance-This is the Marine/Insurance cover for the goods from the port of dispatch to the port of discharge
For goods that arrive by air, the basis shall be Cost and Insurance (C&I) up to the port of discharge (Entebbe)

The ACV provides the right to Customs administrations to be satisfied with the accuracy of any statement, document, or declaration presented for Customs valuation purposes. In case of persistent doubt, after examining the explanation provided by the importer or otherwise, the declared value may be rejected.

The ACV provides the right to an importer to file an administrative and judicial appeal against the decision of Customs without penalty.

Appeal the value to the Manager DPC, and if not satisfied with the decision appeal to the Commissioner of Customs if still dissatisfied appeal to Commissioner-General for a review.

One is also permitted to go to court if not satisfied with the decision of the Commissioner-General.

 

The WTO Agreement on Trade Facilitation encourages WTO Members to provide advance rulings on the appropriate method or criteria, and the application thereof, to be used for determining the customs value under a particular set of facts. Uganda has started the implementation of the advance ruling.
https://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm#II
https://ugandatrades.go.ug/procedure/620?l=en
Technical Guidelines on Advance Ruling for Classification, Origin, and Valuation

The ACV provides that the relationship between the buyer and seller in itself is not grounds for regarding the transaction value as unacceptable. The transaction value may still be accepted provided that the relationship did not influence the price. The procedures to be followed to determine whether the relationship has influenced the price are set out in Article 1.2 of the ACV.
Regarding transactions between members of a multinational enterprise (MNE) group, the prices charged – known as transfer prices – would be examined by Customs in accordance with Article 1.2 of the ACV. For further information, please see http://www.wcoomd.org/en/topics/valuation/instruments-and-tools/guide-to-customs-valuation-and-transfer-pricing.aspx.

Yes, offenses like submission of (Wrong documents), deliberately falsifying information, or contravening any of the Customs Laws or other national Laws which relate to Customs Operations can be prosecuted in court.

 

 

 

This is not true. Customs uses the same method of valuation irrespective of the country from which the vehicles are brought from.

 

The legal basis for determining the value of used vehicles and other used articles is the
East African Community (EAC) Secretariat Administrative Ruling on Valuation of used goods of 13th December 2013 as mandated and Sec 122(5) of EACCMA, 2004 as amended and EAC-Regulations 2009.
The values are predetermined by URA and published on the URA website for clients to use while making tax declarations.

• Passenger Carrying Vehicles-These are vehicles for the transport of persons e.g. saloon cars, station wagons, taxis, buses among others
• Goods Carrying Vehicles-These are vehicles for the transport of goods e.g. lorries, vans, and pickups among others.
• Special Purpose Vehicles-These are vehicles that perform special tasks such as excavators, graders among others

 

• Make-E.g. Toyota, Nissan, Audi, Mercedes Benz, VW, etc.
• Model- E.g. Premio, March, Q7, Actros, Beetle
• Model No/Frame Model/Chassis Model-E.g. NZT240,
• Body Description-E.g. Sedan/Saloon, Estates/Station Wagon, Lorry, Dumper, etc.
• Displacement (CC) E.g. 1500 CC, 150Hp
• Year of manufacture (YOM)-E.g. 2015
• Others: Drive, Fuel type, etc

The transaction Value Method is inapplicable because the sale of used vehicles is subject to the whims and material needs of the seller and not to the actual or material value of the goods
Transaction value of identical goods method and Transaction value of similar goods method equally become inapplicable since there is no Transaction Value initially determined.
Deductive value method –Meeting the requirements for the use of this method is not forthcoming because of the inapplicability of the other first three methods.
The computed value method is also inapplicable because used motor vehicles are not manufactured

Boarded-off vehicles are the ones previously imported, declared, and registered under an exemption regime. (which did not pay taxes at first importation)
Categories include vehicles boarded off by Embassies, Government MDAs, Returning citizens, etc.
The basis for the determination of customs value for re-registration is depreciating the value at first importation.
Customs Value at first importation and NOT statistical value is depreciated using the following depreciation rates:

S/No. Period Rate
1 Not exceeding 1 Year 30%
2 Exceeding 1 year but not exceeding 2 years 45%
3 Exceeding 2 years but not exceeding 3 years 60%
4 Exceeding 3 years but not exceeding 4 years 70%
5 Exceeding 4 years 75%

Customs Value at First Importation –07th January, 2017-EUR 10,000.00
Boarded off on 02nd December 2020
Declared for reregistration on 22nd March 2021
Depreciated by 4 years and 2 months (i.e. Jan’ 2018, Jan’ 2019, Jan’ 2020 and Jan’ 2021+ Feb’ 2021 and Mar’ 2021
Depreciation 75%-EUR 7500.00
Value for Reregistration as at 22nd March 2021-(10,000.00-7,500.00) =EUR 2,500.00

URA Website under A-Z Topics, under (U), Used Motor Vehicle Valuation Database
https://www.ura.go.ug/eventManagementController/getEventListByID?contentId=999000000002561&type=TIMELINE

 A Centralized Customs Document Processing Centre (DPC) is a Customs office where all documentary check function for all Customs declarations is done.

 

DPC was officially launched on the 24th of February 2017 and fully operationalized in June 2017.

 

It is located at Uganda Revenue Authority’s Headquarters, Nakawa Inland Port (NIP) building.

The key stakeholders involved in the DPC clearance process include:

  • Importers and exporters
  • Customs Agents
  • Bonded warehouse owners
  • Ministries, Departments and Agencies (MDA) like Uganda National Bureau of Standards (UNBS), National Drug Authority (NDA), Ministry of Agriculture, Animal Industries and Fisheries(MAAIF), Interpol, Ministry of Works and Transport, National Forest Authority (NFA), Uganda Coffee Development Authority (UCDA),

 

A number of benefits have been registered since the implementation of DPC which include;

  • Shortening Customs declaration processing time through online submission.
  • Promotes transparency in clearance process.
  • Enhances management control and real time monitoring of declaration processing functions that is ease implementation of Standard Operations Procedures.
  • Enhances electronic clearance communication regarding document statuses via email, URA Touchpoint, Helpdesk phones.
  • Boasts professionalism and specialization of Customs Officers
  • Increased productivity of staff
  • Easy implementation of Standard Operating Procedures.

Yes, there are some units that handle specific consignment, these include;

  • Motor Vehicle Unit that handles import clearance function of motor vehicles, motor cycles and earth moving equipment.
  • FUEL unit. This handles import clearance of fuel that is diesel, PMS, Ago and kerosene.
  • Export Unit. This handles export clearance function of all exports that that go through documentary check.
  • General Goods Unit. This processes Customs declaration of all other imports that go through documentary check function

 

DPC operates from Monday to Sunday, seven days a week in three shifts. The first shift starts from 7:00am and ends at 4.00pm and the second shift starts from 4:00pm and ends at 12:00am (midnight). The 3rd shift begins from 12:00 am to 7:00 am Monday to Sunday but due to the advent of COVID 19 the 3rd shift was scaled down.

DPC interacts with stakeholders through various media, these include:

  • URA Touchpoint platform
  • IP Desk phones
  • Face to face meetings
  • Online meetings using ZOOM or and TEAMS
  • Electronic Single Window

No, A Customs declaration is made in the Customs system called Asycuda World on the behalf of the importer or exporter by a duly licensed Customs Agent appointed by the importer or exporter through URA webportal. The Customs Agents acquire the operational annual license after meetings the set out criteria by Customs. However, some importers who are manufacturers with proven compliance record make self-declarations through Asycuda World.

A number of documents are required in Customs clearance of imported goods ranging from financial documents, freight documents and regulatory documents. These include among others:

Financial documents:

  •  Proforma invoice
  • Sales contract
  • Commercial invoice
  • Packing list
  • Certificate of origin
  • Proof of payment that include but not limited to cash receipt, Telegraphic Transfer, letter of credit and payment for premium on the insured goods
  • Declaration of Customs Value form (C36)

Transport documents:

  • Freight invoice
  • Bill of lading
  • Airway for air shipment
  • Railway consignment note

 Regulatory documents/Permits:

  • PVOC/COC for goods that require UNBS inspection from the country of Export
  • NDA importer permit from pharmaceutical goods
  • Phytosanitary certificate
  • Import permit of lotteries and gaming equipment issued by National Lotteries and Gaming Regulatory Board
  • Shipping bill for goods originating from India
  • Export entry for good originating from South Africa

 

DPC releases imported goods on Transaction value, which is the price actually paid or payable for the goods when sold for export to Uganda adjusted in accordance with the provisions of Paragraph 9 to the Forth Schedule of the East African Community Customs Management Act. It is only when DPC Customs doubts the truth or accuracy of the declared value that they will apply other alternative method of Valuation starting with method two, three up to the last one, method six in a sequential order.

 

A client who is not satisfied by a decision made by DPC officer, can lodge an appeal to the Supervisor Customs DPC. In the event, the client is still not satisfied with the Supervisor’s decision, they can lodge an appeal to Manager DPC. And if still not satisfied with Manager’s decision, they can lodge an appeal to Assistant Commissioner Field Services.

 

No. The appeals are lodged through URA Touchpoint to Document Process Centre Section or through submission of a hard copy indicating the grounds of dissatisfactions with the DPC decision at the DPC reception desk. More documentary evidence may be required to support your appeal

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