This is a tax levied by the government on imports from other nations. People often use the words “tariff” and “duty” interchangeably. However, import duty is the real amount of money paid for an imported product, depending on the quantity imported. For example, say one imports an item to the US worth $100,000, and the import duty he would pay will be $4500. This increase in goods imported is often to render the goods less “attractive” so consumers can buy from the domestic market in their country instead. With the current trend towards e-Commerce in the world, looking at how import duties influence online businesses has become of paramount importance to business owners. Given as global nations presently consider online business activities and companies when charging import duties and taxes. The amount of duty paid depends on the quantity of the products imported, the kind of products, and the source country. In Uganda, the Uganda Revenue Authority (URA) is in charge of collecting import duties and imposing import rules.
What it is
They are taxes levied by a certain authority when goods are brought into a country. Quite often than never, the worth of the goods imported decides the duty taxed by the government. They are often interchanged with customs duties, tariffs, or import taxes. In the context of economics, they are levied to create revenue for the country and to shield native goods against the ascendency of foreign products. Nevertheless, another reason for charging taxes is to prevent foreign goods from swamping the local market. Additionally, they can be subjected to reprimand by a country through sanctions.
In Uganda, these duties are taxed by the government, depending on the worth of the goods, the kind of goods, and the exporting country. The Uganda Revenue Authority (URA) handles the affair of collecting import duties and implementing import laws. The rates of import duties in the country depend on the categorization of the imported goods. Some products fall under certain rates, while others are levied ad valorem rates, which are usually a certain percentage of the actual worth of the products. The URA publishes a list of all the applicable duty rates, commonly known as the East African Community Common External Tariff. Not all commodities are subject to import duty, there are specific goods exempted from import duties in the country. They include important medical supplies, certain agricultural inputs, and essential educational materials. Nonetheless, some of these goods are charged other kinds of taxes or fees such as value-added tax (VAT) or excise duty.
How they are charged
People are often unaware of the levy charged on their shipments. However, as a business owner, informing your international customers of the levied duty is quite substantial. This way, they are not shocked when they have to pay an additional charge upon delivery. They can easily calculate the tax to be paid based on their country’s rate and sum that to the price of the product they wish to buy to have an idea of the actual amount to pay. Likewise, this applies to you importing into the country for the first time. Import duties vary from country to country. Usually, they are charged as a cent of the customs value, including insurance and shipping charges. If you are unsure of how to calculate your import duty, you can consult a professional or a business support company. Most of them provide an online calculator to simplify the process.
Note that importers have to pay the levy before their goods are released by customs. When they fail to pay the levied duties, they may face financial fines, penalties, and even confiscation of the goods.
