Uganda continues to lose more than 700 million US dollars every year to smuggling and other illegal cross-border trade, with authorities blaming porous borders, misuse of government vehicles, weak regional enforcement and low public awareness for the growing problem.
According to the Uganda Revenue Authority (URA), most illicit goods enter the country through water routes using fishing boats. The agency says commonly smuggled products include cigarettes, tobacco, rice, wheat and second-hand clothes, with high taxes on some commodities making illegal trade more attractive.
Richard Obedi, Executive Director of Populace Foundation International, said weaknesses in the enforcement of regional trade rules under the East African Community (EAC) continue to benefit smugglers.
He explained that cigarettes are imported from the Middle East into neighbouring countries before being transported through Uganda to another destination, from where they are later smuggled back into the country with ease.
Obedi said Uganda’s policy of imposing high taxes on tobacco products has helped discourage smoking but has also increased incentives for illegal traders. He added that petitions submitted to the Ministries of Health, Trade and East African Community Affairs calling for tougher action against cigarette smuggling have not produced meaningful results.
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URA Customs and Trade expert Justine Namusabi said the fight against smuggling is complicated by weak anti-smuggling laws in some neighbouring countries, allowing criminal networks to operate across borders.
She said enforcement agencies also face challenges arising from the misuse of government vehicles, armed smugglers and Uganda’s vast network of lakes and rivers.
Speaking during a post-EAC budget dialogue in Kampala, Luuka County North MP John Bagoole Ngoobi questioned the effectiveness of the Electronic Cargo Tracking System (ECTS), which was introduced to monitor transit cargo and prevent diversion.
The GPS-based system tracks goods transported from the ports of Mombasa and Dar es Salaam to destinations including Uganda, Rwanda, South Sudan and the Democratic Republic of Congo. Ngoobi also questioned why URA’s enforcement department had failed to curb smuggling.
Responding to the concerns, Namusabi said some cargo legally passes through Uganda to neighbouring countries but is illegally diverted after electronic seals are broken before reaching the declared destination.
She added that smugglers also use fishing boats to transport illicit goods across lakes while disguising them as fish, and noted that some people unknowingly participate in smuggling because they lack adequate information.
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URA says it is stepping up surveillance, strengthening enforcement operations and increasing public sensitisation as it seeks to improve revenue collection after missing tax targets over the past four financial years.
Tax Education expert Hafsa Seguya attributed part of the challenge to differences in tax policies across EAC member states.
She said the absence of harmonised tariff regimes encourages smugglers to exploit countries with lower import duties before moving goods illegally across regional borders.
Seguya cited Pakistan rice imports as an example, explaining that while Uganda and Tanzania impose a 75 percent import duty, Kenya was allowed to import the commodity at a lower rate to address a domestic food shortage. She said some of the rice later finds its way into Uganda and other neighbouring countries through illegal channels.
She called for reforms to harmonise tariffs across the East African Community to reduce opportunities for smuggling.
Meanwhile, Finance Minister Henry Musasizi has directed URA to intensify domestic revenue mobilisation as government targets increasing Uganda’s tax-to-GDP ratio from 14.2 percent to 20 percent by 2030.
Speaking to the URA Board on Thursday, Musasizi said the authority’s strategic priorities are aligned with the government’s revenue objectives and pledged continued support towards achieving the target.
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