Wakilii

Bollore Transport and LLogistics v Uganda Revenue Authourity (Civil Appeal 49 of 2021)

High Court · [2023] UGCOMMC 65 · 2023 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from the Tax Appeals Tribunal ruling on withholding tax and PAYE assessments
Decision
Appeal dismissed with costs to the respondent; PAYE assessment of UGX 404,007,535 on fuel cards upheld

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The High Court dismissed the appeal, holding that the appellant failed to prove that fuel card allowances were used in the course of performing employment duties as required under section 19(2)(d)(i) of the Income Tax Act. The court found that while the appellant provided evidence of travel destinations and fuel consumption, it did not establish the necessary nexus between the employees' contractual duties and the travel undertaken, thus the fuel cards constituted a taxable benefit.

Outcome

Appeal dismissed with costs to the respondent; PAYE assessment of UGX 404,007,535 on fuel cards upheld

Facts

Bollore Transport & Logistics Ltd, a clearing and forwarding company, provided monthly fuel cards to employees for use in their private vehicles. In 2019, Uganda Revenue Authority audited the company's operations for 2015–2017 and issued assessments for withholding tax on payments to casual labourers (UGX 123,539,723) and PAYE on fuel cards (UGX 404,007,535). The company disputed both assessments before the Tax Appeals Tribunal. The Tribunal set aside the withholding tax assessment but upheld the PAYE assessment on fuel cards, finding that the company failed to prove the fuel was used for work-related travel. The company appealed to the High Court, arguing the fuel cards were not taxable benefits because they had accountability mechanisms and the fuel was used only for work purposes.

Issues

  1. Whether the provision of fuel cards to the appellant's employees constituted a taxable benefit under the Income Tax Act.
  2. Whether the Tribunal erred in ordering the appellant to pay taxes amounting to UGX 404,007,535.
  3. Whether the Tribunal properly evaluated the evidence on record.

Orders

  • Appeal dismissed.
  • Costs awarded to the respondent.
  • The memorandum of appeal struck off the record as alien to tax appeals procedure.
  • The appellant's preliminary objection regarding the respondent's supplementary record overruled.

Rules and key headnotes

Income Tax — Employment Income — Travel Allowances — Requirements for Exemption under Income Tax Act s.19(2)(d)(i)
For a travel allowance to qualify for exemption from employment income under section 19(2)(d)(i) of the Income Tax Act, an employer must prove that: (a) the employee incurred or will incur travel expenses in the course of performing duties of employment; and (b) the allowance does not exceed the expenses actually incurred or likely to be incurred. The phrase 'in the course of performing duties of employment' requires proof of a nexus between the employee's contractual duties and the travel undertaken.
Income Tax — Burden of Proof — Tax Appeals
Under section 26 of the Tax Appeals Tribunal Act, the burden is on the taxpayer to prove that a tax assessment is incorrect. Where an employer claims that fuel allowances are exempt from PAYE as travel expenses, the employer must adduce evidence establishing the relationship between the employees' duties and the travel destinations for which fuel was provided.
Tax Statutes — Strict Construction — No Room for Intendment
In interpreting a taxing statute, one must look merely at what is clearly said. There is no room for any intendment and there is no equity about a tax. Tax provisions must be read strictly with no additions.
Income Tax — Travel Allowances — Prepaid Allowances and Reimbursements
Section 19(2)(d) of the Income Tax Act applies to both reimbursements of expenses actually incurred and allowances given in advance of incurring travel expenses. The provision envisages allowances given for expenses 'actually or likely to be incurred', thus covering prepaid travel allowances such as fuel cards.
Income Tax — Travel Allowances — Differential Allocation Not Determinative of Benefit Status
The fact that different employees receive different amounts of fuel allowance does not, by itself, render the allowance a taxable benefit. Employees carrying out different roles will not necessarily require the same amount of fuel to carry out their duties. The key issue is whether the allowance is required in the course of performing one's duties, not whether it is distributed equally.
Tax Appeals — Procedure — Appeals from Tax Appeals Tribunal to High Court
An appeal to the High Court from a decision of the Tax Appeals Tribunal is instituted by lodging a Notice of Appeal as provided under section 27 of the Tax Appeals Tribunal Act. A memorandum of appeal as required by Order 43 Rule 1(1) of the Civil Procedure Rules is not required and is alien to tax appeals procedure. Section 27 of the Tax Appeals Tribunal Act negates the requirements of Order 43 of the Civil Procedure Rules.

Legislation cited (9)

Cases cited (3)

  • Uganda Revenue Authority v Toro Mityana Tea Company Ltd (High Court Civil Appeal No. 4 of 2006)
  • Cape Brandy Syndicate v Inland Revenue Commissioners [1921] KB 64
  • Uganda Revenue Authority v Siraje Hassan Kajura (Civil Appeal No. 09 of 2016)

Full judgment

↓ Download PDF

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

Bollore Transport and LLogistics v Uganda Revenue Authourity (Civil Appeal 49 of 2021) [2023] UGCommC 65 (1 September 2023)
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.