Smuggling And Effects
Smuggling means the importation, exportation, or carriage coastwise, or the transfer or removal into or out of a Partner State, of goods with intent to defraud the Customs revenue, or to evade any prohibition or restriction on, regulation, or condition as to such importation, exportation, carriage coastwise, transfer, or removal of any goods. In short, Smuggling is an activity that involves the importation or exportation of goods with the objective of evading taxes.
Smuggling is an ILLEGAL method of conducting business. The principal causes of smuggling are greed for wealth, ignorance, and lack of nationalism.
Outright avoidance of official customs controls across the borders
For example, on Lake Victoria, overland, on road, rail, and often through the bush. This form of smuggling is generally associated with highly marketable goods, goods of high tax value, and prohibited or restricted goods.
Under the declaration of goods
This is a circumstance where the importer declares a lesser quantity on importation documents than the actual goods being imported. This form of smuggling occurs through customs controls, usually deliberately, on the side of the importer.
Undervaluation of goods
This is a situation whereby goods are given a lower value than they have. Undervaluation often happens out of negligence. It aids smuggling indirectly
Misclassification of goods
This means that goods are declared under a different class of imports, particularly to attract lower rates of tax with the intent to reduce the tax liability. This again may happen out of ignorance, negligence, or deliberately. This problem also aids smuggling.
Falsification of documents
Sometimes documents about certain goods are tampered with in their particulars with the intent to benefit the taxpayer by a reduction in tax
Misdeclaration of country of origin. This is a circumstance whereby a different country is declared as the source of goods instead of the correct country of origin. It is very common with COMESA and non-COMESA states because of the lower tariff rates for goods originating from COMESA member states.
Transit goods are those goods that are destined for other countries through Uganda, e.g., from abroad through Uganda to Rwanda, DRC, etc.
Re-exports are goods that come into the country but are subsequently exported. In both these cases, smuggling occurs when goods finally end up on the Ugandan market, leading to total evasion of taxes and other controls.
There are three major reasons:
- Protection of the economy, such as local industries, local markets, and primary production.
- Protection of society against health and environmental hazards.
- Security purposes by restricting the importation of firearms.
Please note:
Restricted Goods means any goods the importation, exportation, transfer, or carriage coastwise of which is prohibited, save by any conditions regulating such importation, exportation, transfer, or carriage coastwise, and any goods the importation, exportation, transfer, or carriage coastwise of which is in any way regulated by or under the Customs laws.
Prohibited Goods means any goods the importation, exportation, or carriage coastwise of which is prohibited under this Act or any law for the time being in force in the Partner States
