Wakilii

Man Engineering Uganda Limited v Uganda Revenue Authority [2026] UGTAT 16

Tribunal · 2026 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to Tax Appeals Tribunal challenging VAT assessment for failure to file returns
Decision
VAT assessment set aside; applicant to pay only statutory penalty for failure to file returns

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Tribunal held that a VAT assessment based solely on failure to file returns, without evidence of actual taxable supplies, is untenable where the taxpayer proves no business was conducted during the assessed period. The Tribunal found that the applicant provided sufficient evidence that its directors were unavailable due to detention, death, and departure from the country, and that its bank account was closed for inactivity, demonstrating no business transactions occurred. The applicant is liable only for the statutory penalty for failure to file returns under Value Added Tax Act s.65(2), not for the estimated VAT liability of UGX 718,139,648.

Outcome

VAT assessment set aside; applicant to pay only statutory penalty for failure to file returns

Facts

Man Engineering Uganda Limited was assessed VAT liability of UGX 718,139,648 for the period 2014 to 2019 for failure to file VAT returns. The company objected, stating it conducted no business during that period because one director (Asea Geoffrey) was arrested and detained from 2014 until released on bail in September 2018 with conditions requiring him to remain in Kampala; a second director (Adiga Pastori) fell ill and later died; and a third director (Andama Jimmy) left for South Sudan in 2014. The company provided a bail bond form, a letter from Centenary Bank confirming the account was closed by the system due to prolonged inactivity, and a death certificate. URA maintained the assessment, arguing the company failed to provide sufficient documentation including bank statements for the assessed period. The company filed income tax returns for 2016-2017 relating to work done in 2013-2014 but did not file VAT returns.

Issues

  1. Whether the Applicant is liable to pay the tax assessed?
  2. What remedies are available?

Orders

  • Application allowed.
  • The assessment of Shs.718,139,648 is untenable and is hereby set aside.
  • The Applicant is to be assessed by the Respondent to pay the penalty for failure to file VAT returns for the period 2014 to 2019 using the formula required by law.
  • Each party to bear their own costs.

Rules and key headnotes

Tax Law — Value Added Tax — Liability to Pay — Requirement of Taxable Supply
Under Value Added Tax Act s.4 and s.5, VAT is chargeable only on taxable supplies made by a taxable person; where a taxpayer proves no business was conducted and no taxable supplies were made during the assessed period, there is no legal basis for a VAT assessment.
Tax Law — VAT Assessment — Default Assessment — Burden of Proof
Where URA issues a default VAT assessment based on failure to file returns, the burden lies on the taxpayer to prove the assessment is excessive; however, where the taxpayer provides sufficient evidence on the balance of probabilities that no business was conducted during the assessed period, the assessment cannot stand.
Tax Law — Failure to File Returns — Penalty Provisions
Under Value Added Tax Act s.65(2), a person who fails to lodge a return within the required time is liable only to pay a penal tax of either two hundred thousand shillings or an interest charge calculated according to the Fifth Schedule, not an estimated VAT liability based on assumed supplies.
Tax Law — Tax Appeals Tribunal — Preliminary Objection — 30% Deposit Requirement
The requirement under Tax Appeals Tribunal Act s.15(1) to deposit 30% of the tax assessed does not apply where the dispute concerns the legal basis or procedural legality of the assessment itself, rather than the quantum of tax payable.
Evidence — Sufficient Evidence — Balance of Probabilities — Civil Standard
In civil tax matters, sufficient evidence is established on the balance of probabilities; evidence including bail bond forms, bank closure letters, death certificates, and sworn affidavit testimony can satisfy this standard to prove that no business was conducted during an assessed period.
Tax Law — Record Retention — Five-Year Limitation
Under Tax Procedures Code Act s.15(1)(c), a taxpayer is required to retain records for only five years after the end of the tax period to which they relate; URA cannot require production of records beyond this statutory retention period.

Legislation cited (13)

Cases cited (12)

  • Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696
  • Musoke Mike v Kalumba James (HCRC 9 of 2019)
  • Uganda Projects Implementation and Management Centre v Uganda Revenue Authority (SCCA No. 2 of 1999)
  • Metcash Trading Co. Ltd V Commissioner for South African Revenue Services
  • Vivo Energy Uganda v Uganda Revenue Authority (Misc. Application No. 78 of 2024)
  • Fuelex v Uganda Revenue Authority (Constitutional Petition No. 3 of 2009)
  • Elgon Electronic v Uganda Revenue Authority (HCCA 11 of 2007)
  • Samuel Mayanja v Uganda Revenue Authority (HCT-00-CC-MC-0017 of 2005)
  • Radio Pads Limited v Uganda Revenue Authority (HCCS No. 0008 of 2013)
  • Tradeworth Establishment Ltd v Uganda Revenue Authority (TAT No. 338 of 2024)
  • Busulwa Ssalonga v Abdu Senabulya (High Court Civil Appeal No. 7 of 2002)
  • Explorer Ltd v Uganda Revenue Authority (Application TAT No. 87 of 2023)

Full judgment

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

Man Engineering Uganda Limited v Uganda Revenue Authority 2026 UGTAT 16 (9 March 2026)
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.