The ruling today is a huge boost to business owners that have for long argued that their money is unnecessarily held up at URA as cases drag on for years at the Tax Appeals Tribunal. It is, however, a blow to URA that has been collecting this money before one could challenge its decisions.
Fuelex Uganda limited challenged requirement to first pay 30% of tax in dispute before challenging tax assessment by URA
disputing assessments by Uganda Revenue Authority will no longer be required to
deposit 30 per cent of the amount in dispute before launching a challenge at the Tax
Appeals Tribunal (TAT).
15 of the Tax Appeals Tribunal Act requires a company or any taxpayer who disputes a tax bill to deposit 30 per cent of the
money in dispute to URA before launching a challenge. But the Constitutional Court Judges led by Alfonse Owiny-Dollo ruled that
the requirement was unconstitutional and went against a constitutional provision
that guarantees everyone a fair hearing.
a majority ruling on Friday, Justices Alfonse Owiny Dollo, Kenneth Kakuru,
Egonda Ntende and Ezekiel Muhanguzi said that the requirement for payment of
30 per cent before challenging URA assessments contravenes Article 44 (c) of the
Constitution. The cited article guarantees everyone to a fair hearing.
The ruling today is a huge boost to business owners that
have for long argued that their money is unnecessarily held up at URA as cases
drag on for years at the Tax Appeals Tribunal. It is, however, a blow to URA that has been collecting this
money before one could challenge its decisions.
It is an outcome of a petition lodged by Fuelex
Uganda Limited, in 2009 after it was presented with a tax bill of 160.5 million Shillings
by URA. URA said Fuelex had not paid the money between June 2005 and September
2006. But Fuelex
objected to the tax bill, but it had to deposit 30 per cent of the disputed amount before challenging it at the Tax Appeals Tribunal.
the Constitutional Court, Fuelex argued that the provision clearly offends the
rule of law provisions in the Constitution which guarantee equal access to justice
for everyone and negates all forms of equity known to the law.
On its side, URA argued that Fuelex had not paid the
requisite 30 per cent of the tax it had objected to prior to lodging the objection
hence the application was incompetent. The court rejected this.
Justice Hellen Obura dissented the majority ruling, arguing that there was no
need to make reference to the constitutionality of the payment of 30 per cent of the
tax in dispute because the Supreme Court had upheld it. She
awarded costs to the Uganda Revenue Authority.
declaration of payment of 30 per cent tax in dispute before challenge comes at heals
another ruling last month where the Tax Appeals Tribunal itself said companies can pay the money in instalments.