Wakilii

Airtel Uganda v Uganda Revenue Authority (Application No TAT 43 of 2020)

Tribunal · [2020] UGTAT 26 · 2020 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to Tax Appeals Tribunal following objection to additional tax assessment and partial consent settlement on principal tax
Decision
Application granted — applicant not liable to pay interest on disputed tax during pendency of proceedings before the Tribunal

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a taxpayer who has filed an application before the Tax Appeals Tribunal and paid 30% of the disputed tax cannot be penalised by imposition of interest on the tax liability while the dispute is pending determination. The requirement to pay 30% does not attract payment of interest, and no provision in the taxing laws imposes such liability. Interest totalling UGX 823,439,675 for the period July 2020 to April 2021 was not awarded to the respondent.

Outcome

Application granted — applicant not liable to pay interest on disputed tax during pendency of proceedings before the Tribunal

Facts

Airtel Uganda Limited provides telecommunication services and rents out space. Following an audit by Uganda Revenue Authority, additional VAT assessment of UGX 11,284,067,439 for January 2013 to February 2019 and additional income tax assessment of UGX 39,641,648,554 for 2017 to 2018 were issued. The applicant objected on 17 February 2020; the objection was disallowed on 15 May 2020. The applicant filed an application to the Tax Appeals Tribunal on 29 May 2020. On 7 June 2021, the parties entered a partial consent settlement whereby the applicant agreed to settle principal VAT of UGX 3,409,081,404 and principal income tax of UGX 3,617,312,998. However, the applicant disputed liability for interest totalling UGX 823,439,675 for the period July 2020 to April 2021. The parties referred the issue of interest to the Tribunal for determination.

Issues

  1. Whether the applicant is liable to pay interest on tax that was in dispute before the Tribunal during the period July 2020 to April 2021.
  2. Whether payment of 30% of disputed tax attracts liability to pay interest while the matter is pending determination.

Orders

  • The applicant is not obliged to pay interest while its application is pending determination.
  • The Tribunal will not award any interest to the respondent.
  • No order as to costs.
  • The remaining terms of the consent settlement still abide.

Rules and key headnotes

Tax Law — Interest on Disputed Tax — Liability During Pendency of Appeal
A taxpayer who has objected to a tax assessment, filed an application before the Tax Appeals Tribunal, and paid 30% of the assessed tax cannot be penalised by imposition of interest on the disputed tax liability while the matter is pending determination before the Tribunal.
Tax Law — Payment of 30% of Disputed Tax — Effect on Interest Liability
The requirement to pay 30% of disputed tax does not attract payment of interest. There is no provision in the taxing laws that imposes liability to pay interest on the basis of the 30% payment requirement while an application is pending.
Tax Law — Tax Procedure Code Act — Waiver of Interest and Penalty
Section 40C of the Tax Procedure Code Act waived all outstanding interest and penalty as at 30 June 2020. Interest arising before that date is not recoverable.
Administrative Law — Right to Fair Hearing — Penalising Taxpayer During Dispute Resolution
Penalising a party by imposing interest where the wheels of justice are clogged with many disputes and delays beyond the party's control is an affront to the right to a fair hearing and a denial of access to equitable justice.

Legislation cited (1)

  • Tax Procedure Code Act s.40C

Cases cited (2)

  • Airtel Uganda Limited v Commissioner General (Civil Appeal No. 40 of 2013)
  • Fresh Handling Ltd v Uganda Revenue Authority (Application No. 83 of 2019)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Airtel Uganda v Uganda Revenue Authority (Application No TAT 43 of 2020) 2020 UGTAT 26 (20 May 2020)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.