Uganda: Country, DR Congo in Customs Tie Up to Check Revenue Leaks

Source from:  East African Business Week (Kampala) 28 January 2008 01/29/2008

The cat and mouse games along the Uganda-DR Congo customs points could soon come, at best, to an all time low following the signing of a Memorandum of Understanding (MoU). The Kampala MoU between Uganda Revenue Authority (URA) and DR Congo signed last week will check revenue leaks that the two countries have borne over the many years. Although not privy to the particulars of the MoU, sources involved told East African Business Week after the signing that information sharing and formulation of strategies to remove trade barriers along the route were high up on the agenda. Different customs procedures and language are some of the key barriers that both countries revenue officers have to encounter in the execution of their duties. The memorandum, signed by Ms. Allen Kagina, the URA commissioner general and Mr. Samuel Simeni, the deputy commissioner for customs in DR Congo is a follow-up of a meeting between the two heads of state in Arusha, Tanzania last year and witnessed by Tanzania's President Jakaya Kikwete. Kagina said that since many of the barriers to doing business along the border of the two land locked countries were within the control of both states, the agreement signed should not remain on paper. DR Congo is the first customs tie up for Uganda. Currently Uganda operates along international treaties with other countries outside the East African Community bloc. URA has now and again battled with unscrupulous traders along the 400-kilometre border who take advantage of the several ungazetted customs routes and inadequate levels of cooperation between the two countries. For example, the continued smuggling of the Supermatch cigarette brand from DR Congo has cost the government billions of Uganda shillings in taxes over the years and distress to the two main local players, Leaf Tobacco Uganda Limited and British American Tobacco Uganda Limited (BATU). Smuggled cigarettes, in the 2005 financial year caused a loss of over Ush8 billion ($4,705,882) to the state in unpaid taxes. Ironically, the smuggled Supermatch cigarettes are from Leaf Tobacco's sister companies, CTC Congo and Mastermind Kenya. Most frustrated about the increasing arrivals of smuggled cigarettes into the country from especially DR Congo has been BATU. In some isolated tobacco instances, URA using its intelligence machinery was able to trace some of the cigarette consignments to a factory in DR Congo where it failed to be accorded the expected cooperation as a national tax body despite top-level clearance from the capital, Kinshasa. Business operators are hopeful that the laxity exhibited in monitoring movement of cargo across the two borders would be no more. Enditem