Question One

Jerome Junior (JJ) lost his job in October 2021 due to the effects of the COVID-19
pandemic. In November 2021 he imported a set of equipment from Istanbul, Turkey to
start a carpentry business. He incurred the following costs:

(i) He paid the manufacturer United States dollar (USD) 22,300 (Free on Board) for the
items.

(ii) Shipping fees from the port of Istanbul to the port of Mombasa USD 1,200,
insurance of USD 830, and port handling costs of USD 340.

(iii) Training costs of machine operators USD 650 and bought a special packaging
container for the transportation for the equipment of USD 120.

(iv) He paid installation fees of USD 310 to an authorized operator in Uganda.

Additional Information:

The applicable tax rates are as follows:

Import duty 25%

Value added tax 18%

Excise duty 20%

Withholding tax 6%

The prevailing exchange rate at the time of importation was 1 USD: Shs 3,600.

Required: Determine JJ’s customs value and custom taxes be paid.

Question Two

In the month of March 2023, Hill Processors Limited (HPL) imported an all-in-one apple
juice processing unit from Munich through Bremen a seaport in Germany. For the
equipment, HPL paid £ 28,000; damage proof packaging of £ 110; transport to seaport
of £ 55; insurance of £ 420; and freight of £ 320.

As condition of sale, HPL is required to pay a trainer £ 560. HPL also paid port handling
charges in Bremen of £ 155, and $ 550 at the port of Mombasa.

Additional Information:

(i) The exchange rate ruling at the time of import was as follows:

$ 1: Shs 3,500.

£1: Shs 4,000.

(ii) The applicable customs taxes were import duty at 25%, VAT at 18%, WHT at 6%,
and infrastructure levy at 1.5%

Question three

Wide Broadcasting Services (WBS) is a radio station operating in Soroti in Eastern

Uganda. In the October 2022 WBS received a notice from the Uganda Communications
Commission (UCC) requiring the broadcaster to switch from 3 kilowatts transmitter to 2
kilowatts for which it’s register.

The company then entered into an agreement with an Italian company to manufacture
and supply two 2-kilowat transmitters at a cost of $ 12,333 each. The unit will also
include a frequency filter valued at $ 2,850. WBS agreed to pay the manufacturer 10%
of the total cost in advance and the 90% upon shipment of the equipment. The invoice

presented to customs included an additional of $ 3,122 for the installation and training
conducted by the manufacturer agents.

The equipment was shipped in January 2023 by air for which WBS paid air freight of $
1,850, and insurance of $ 930. WBS also paid the manufacturer $ 112 for packaging.

Additional information:
Exchange rate of the $ 1= Shs 3,600.

Other rates:

Import duty 25%

Infrastructure development 1.5%

Withholding tax 6%

Value added tax 18%

Required:

Determine the customs value of the import and custom taxes paid by WBS for the
equipment.