Govt to finally implement local insurance for importers
With the launch of the online portal, Insurance Regulatory Authority says that marine insurance will now be fully implemented. PHOTO / MICHAEL KAKUMIRIZI
What you need to know:
- Government has been shifting implementation dates for marine cargo insurance since 2022
Effective January 1, next year, all importers will be required to insure their cargo using local companies.
The new requirement is provided under the Marine Cargo Insurance Policy, which first took effect on July 1, 2022, but was postponed, with Uganda Revenue Authority saying importers needed a grace period through which they would adjust and adhere to the new system.
However, several implementation dates have since been instituted and shifted due to the absence of supporting systems.
However, the launch of an online marine insurance portal early this week indicates that now it is finally ready to go live.
Speaking during the launch of the portal, Finance Minister Matia Kasaija, who was represented by the Secretary to the Treasury Ramathan Ggoobi, said government has been losing a lot of money in terms of premiums to foreign insurance companies, which should now come back to local insurance companies through the local marine insurance scheme.
“We have noted from the Inter-Government Standing Committee on Shipping report that between 2009 and 2013, government lost revenue of Shs60.3b as VAT and Shs35b as stamp duty through the insurance of imports by foreign insurers. This is in addition to the massive insurance premium flight. With increased imports over the years, the country has certainly lost more revenue,” he said.
Government has been shifting the timelines for implementing the policy for about three years now.
Mr Ibrahim Kaddunabbi Lubega, the Insurance Regulatory Authority chief executive officer, said the online platform will now kick start the implementation of the policy by ensuring prompt and efficient claims processing, while at the same time, importers will now have direct access to local insurers, thereby eliminating the complexities of dealing with foreign entities.
IRA, he also noted, had put together a plan through which different stakeholders, especially importers will be sensitised on voluntary compliance and how to obtain cost and freight quotations from suppliers.
The portal, IRA noted, will be accessed by importers through the Uganda Insurers Association website, where 20 non-life insurers have already joined to cover all marine-related risks.
Mr Asad Kisitu Kigozi, the URA commissioner in charge of customs, said the new policy creates another stream of revenue through the stamp duty which is paid against premiums.
