Stakeholders frustrated by slow start to enforcement of compulsory marine insurance

Different stakeholders have expressed concern over the slow start to the implementation and enforcement of the mandatory marine insurance by importers.

Speaking during a stakeholders’ meeting at Hotel Africana,  Alhaji Jaffer Abdallah, the  chairman Uganda Clearing Industry and Forwarding Association (UCIFA) said instead of enforcing  the mandatory marine insurance, tax body URA focuses on the  1.5% infrastructure tax  on imports.

“As customs agents our role is to assist in implementation and our principals are URA but we all know that the taxman has always levied a 1.5% in case you don’t have an insurance policy.  This has continued to go on despite the availability and coming into force of the law on compulsory marine insurance,” Abdallah said.

“If URA finds it a disadvantage because they are losing the 1.5% , I find it a disservice to the nation. I wish they could know what marine insurance would bring into the country in terms of income tax. This would mean every importer pays for insurance and insurance companies pay  an added income tax  over and above what we have been paying. “

The chairman of the Uganda Clearing Industry and Forwarding Association said the tax body has slept on its job.

“There is no cargo that comes into country without going through URA but they are not serious about implementation. It would be prudent for them to start implementation so that we realise the benefits of marine insurance.”

Jemba Kanakulya Mulondo, the deputy spokesperson of Kampala City Traders Association, concurred with the chairperson of the clearing and forwarding agents noting that the cost of insurance at the rate of 0.5% is very small and that it should not a matter of concern for importers.

“Marine insurance policy is an opportunity for country to retain not only revenues but also a lot of money being spent into other economies and if we can have it done locally, a lot can be achieved. We are looking at our economic performance slowing down but this is one area that would act as a shock absorber in case we have been implementing this policy .However, due to the slow start and unwillingness by certain institutions like URA to budge and support it, it is taking longer than expected,”Jemba said.

He added,” The importance( of marine insurance) is to mitigate loses in case of any an eventuality during shipping but we are only moving in circles still waiting for authorities in government to ensure implementation is done. However, by the look of things, the  URA good will still lies with the 1.5% that they seek to pool.”

The KACITA deputy spokesperson explained despite grey areas, compulsory marine insurance is something that needs to be implemented.

“We need smooth roadmap that once we begin, no one should stop us.  Insurance companies in Uganda ought to be represented everywhere in the world but said this stems from an agreement between the Ugandan government and its counterparts where the country imports from. This can be done either through having partners in other parts of the world or setting up branches in those areas.”

The Insurance Regulatory Authority manager for inspection, Kaddu Mukasa however said despite the setbacks, it is never too late.

.”There are some setbacks in the implementation but this being a new concept, there are always challenges expected. They might not have attained 100% implementation, but we recognize the small gains so far reached. There is partly implementation of marine insurance policy. Several insurance companies have partnered with clearing agents to implement marine insurance policy,”Kaddu Mukasa said.

“As IRA we haven’t fully achieved the potential but we envisage in the coming few years, we will have achieved what we want.  In other areas in the region where it has been implemented, the journey has not been smooth because of being a new concept.”

He noted that the regulator will  keep organizing sensitization and awareness programs for stakeholders to enable them understand the bigger picture of the importance of marine insurance.