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| Demonstration of the Regional Electronic Cargo Tracking system (RECTs). |
Uganda Revenue Authority (URA) is mandated to
collect tax revenues on behalf of the Government of Uganda (GOU).
As URA increases the revenue it collects the
government reduces its reliance on foreign aid to fund budget priorities such
as education, healthcare and infrastructure development among others. URA collects
revenue from both domestic trade and international trade (customs revenue).
Revenue from international trade accounts for over 45% of total revenue
collected.
However, URA faced various challenges in executing
its mandate of colleting tax revenue from international trade and facilitating
business to import and export competitively. There were i\delays in cargo
clearance due to cumbersome business processes, which in turn delayed the
collection of related revenue. Also, businesses incurred losses due todiversion
and disappearance of cargo along transit routes which in turn led to a loss of
related business income and government revenue. Furthermore, the unpredictable
customs systems that lacked transparency and predictability generally increased
the cost of doing business rendering Uganda uncompetitive.
Uganda, a land locked country, imports its cargo
through the ports of Mombasa in Kenya and Dar es Salaam in Tanzania. This posed
unique challenges, for example, the 950 km distance from Mombasa to the main
Ugandan border of Busia should take not more than 15 hours by road. However,
poor international trade processes, unscheduled stops and non-tariff barriers
caused delays to cargo heading to Uganda.
The 2010 World Bank Report indicated that, in
Uganda, it took 34days, 7 documents and cost USD 3,390 to import a 20foot
container. Also, it took 37days, 6 documents and cost USD 3,190 for export a
20foot container. Finally, the Regional Time Release Study conducted in 2012,
reported that cargo heading to Uganda would take up to 18 days from entering
port until final destination and clearance. Additionally, Ugandan cargo owners
would frequently lose their goods in transit unless they employed physical
police escort at a cost of USD250 per day. Furthermore, cumbersome and time consuming
procedures at the borders also led to slow clearance.
TMEA
Intervention:
In September 2012, URA with funding from TMEA rolled
out interventions designed to bring about transformational change in the way
the country facilitated and conducted international trade and customs business.
The intervention included the following: a review of
business processes; capacity building through training and change management;
adopting an improved customs management system (ASCYUDA World a web based
customs management system developed by UNCTAD); introduction of Authorised
Economic Operators (AEO); and an Electronic Cargo Tracking System (ECTS)
developed by BSMART Technologies. TMEA provided financial support totalling USD7.3million
for this package of interventions.
How
it was designed:
In 2012, TMEA and URA signed a Memorandum of
Understanding, which established the foundation for cooperation between the
parties. It covered a limited set of activities that TMEA could fund through
its Uganda Country Programme budget. The choice of projects involved a
participatory approach with extensive consultations held with senior URA management
including the Commissioner General and approved by the URA Board of Directors.
The consultations involved other URA stakeholders. URA and TMEA based their
final decision on the results of gap analysis that took into account other
planned projects implemented by URA and other donors such as DFID, KFw and IMF.
A Joint Steering Committee (JSC), comprised of
donors and URA Senior Management was constituted. The Commissioner General of
URA chaired the JSC which held meetings on a quarterly basis.
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