The Uganda Revenue Authority (URA) has postponed a meeting with a group of lawyers challenging the tax body’s use of an illegal car tax collection method.
The lawyers argue that URA’s reliance on the fallback method for valuing imported cars, rather than the legally mandated transaction value method, is unlawful.
The transaction value method requires URA to calculate taxes based on the actual invoice price of imported cars. For example, if a Toyota Harrier is imported for $1,000, the tax should be based on that amount. However, URA has been using its own estimates, leading to inconsistencies in tax amounts for similar vehicles.
Lawyers Phillip Karugaba, Matovu Farook Haruna, Lillian Drabo, Odur Anthony, William Mubumuza, and Peter Arinaitwe had scheduled a meeting with URA for June 11, 2024, to address this issue. Following the postponement, lawyer Isaac Ssemakadde joined the team to increase pressure on URA.
In 2013, Justice Christopher Madrama Izama ruled that URA’s abandonment of the transaction value method was illegal. This ruling was upheld by the Court of Appeal in 2023, where Justice Catherine Bamugemereire emphasized that import duties must be based on the total amount paid for vehicles. Despite these rulings, URA continues to use the fallback method without obtaining a stay of execution or lodging an appeal with the Supreme Court.
The lawyers accuse URA of contempt of court, stating that the tax body is aware of the orders and has the ability to comply but chooses not to.
Amid these legal challenges, an internal document from URA has surfaced, warning staff against leaking information that could damage the organization’s reputation. The document reminds employees of URA’s core values—patriotism, integrity, and professionalism—and warns that staff with conflicting interests who undermine URA’s efforts should resign.
“If you happen to be such a member of staff, this email serves to give you an opportunity to hand in your resignation. Otherwise, please note this behavior will not be tolerated under any circumstances as the rest of us warriors are working double time towards Uganda’s economic independence,” the document states.
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