18 December 2012

Uganda: Traders Protest Value Added Tax

A group of 13,946 traders has sued tax collector Uganda Revenue Authority (URA), protesting the levying of domestic value added tax (VAT) on their imported goods, saying it is illegal.

In the representative suit filed by one Margaret Rwaheru on December 11 at the High Court in Kampala, the traders want court to compel URA to refund the money with interest from the date of collection until full payment at the commercial rate.

"Plaintiffs imported goods and paid import duty on importation of goods as provided for under East African Customs Management Act 2004. Plaintiffs were also at the time of importation charged domestic value added tax which is not provided for in the law," the plaint states.

Through Birungyi, Barata and Company Advocates, they claim to have suffered loss, inconvenience, and damage. They assert that they are entitled to the money being collected by URA.

Court documents however do not indicate how much each of the traders is demanding, nor does it indicate the contentious amount each of the traders paid as tax. But they want court to pronounce that the domestic VAT is being levied on the imported goods of the plaintiffs with no legal basis.

Court has asked the tax authority to file its defence within 15 days from the date of receipt of the summons. In the summons dated December 11, 2012, the court's civil division registrar Eudes Keitirima has cautioned URA to heed, lest the case is heard and judgement passed in its absence.

The case file has been allocated to Justice Elizabeth Musoke. However, a hearing date is yet to be fixed.

On Monday, an official of URA's Public and Corporate Affairs department Herbert Ssempogo, confirmed to New Vision that they had received the suit. He however said the legal team was scrutinizing the case to determine the next course of action.

"It is being studied by the legal team. However, an adequate response will be made at an appropriate time," Ssempogo said.

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