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Motor insurance fees increase by Shs30,000
The wreckage of Gaagaa bus that overturned on Monday afternoon in Arua heading to Kampala. Photo by Felix Warom.
What you need to know:
This follows the government’s pronouncement of an increase on stamp duty as it explores avenues to raise more revenue.
Motorists have to part with an extra Shs30,000 to buy the mandatory Motor Third Party insurance cover for their vehicles, after the Ministry of Finance instructed the Insurance Regulatory Authority to enforce the implementation of the increment last week, the Daily Monitor has learnt.
Insurance Regulatory Authority (IRA) spokesperson Mariam Nalunkuuma told this newspaper in a telephone interview that the authority received communication from the Ministry of Finance last Friday instructing it to enforce the implementation of the increment on Stamp Duty with immediate effect.
Finance Minister Maria Kiwanuka increased stamp duty on the compulsory motor third party insurance policies in the 2013/14 budget by Shs30,000, up from Shs5,000.
Stamp duty is a tax levied on certain documents and transactions and in the case of motorists. It is collected by insurance companies on behalf of IRA and the Uganda Revenue Authority.
The increment brings the stamp duty fee to Shs35,000.
Implementing the increment means motorists who have been paying annual premiums ranging between Shs14,000 and about Shs400,000 depending on the motor cycle or vehicle type and usage, will now have to add Shs30,000 on each policy that is bought.
For instance, motor cyclists who have been paying Shs14,000 inclusive of stamp duty, sticker and insurance fees now have to pay Shs44,000, with the increment.
A saloon car which has been paying Shs32,000 now has to pay Shs62,000 while buses now have to pay Shs403,000 to get the service, up from Shs373,000.
IRA chief executive officer Ibrahim Kadunabbi Lubega also recently said the increment might force motorists not to buy the policy, something that will have a negative effect on the growth of the insurance industry.
Ms Nalunkuuma, however, said IRA will continue engaging the Ministry of Finance and members of Parliament to convince them not to pass the increment, saying it will jeopardise the industry’s effort to sensitise motorists about the benefits of motor third party insurance.
