Wakilii

Okuja v Uganda Revenue Authority (Application No TAT 72 of 2018)

Tribunal · [2020] UGTAT 23 · 2020 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application challenging refusal to pay informer's reward under Finance Act 2014 and Tax Procedure Code Act
Decision
Application dismissed with costs to the respondent

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Tribunal held that exports of unprocessed foodstuffs and agricultural products attract a zero rate of VAT under the Third Schedule of the VAT Act. Where a supply is covered by both the Second Schedule (exempt supplies) and the Third Schedule (zero-rated supplies), section 77 of the VAT Act provides that the supply shall be treated as within the Third Schedule. The applicant's information was misconceived and did not entitle him to an informer's reward as the VAT refunds were rightfully paid.

Outcome

Application dismissed with costs to the respondent

Facts

The applicant, a former employee of Uganda Revenue Authority, made an informer's disclosure alleging that URA wrongly paid VAT refunds totalling Shs. 15,819,255,000 to exporters of unprocessed foodstuffs and agricultural products as zero-rated supplies when they should have been treated as exempt supplies. He relied on a High Court decision in URA v Total Uganda Ltd which held that exempt supplies are not taxable supplies. URA investigated the disclosure and concluded that the refunds were rightfully paid as the exports qualified as zero-rated supplies. The applicant sought a 10% reward under section 8 of the Finance Act 2014 for information leading to tax recovery. URA refused the reward on grounds that the information was incorrect and that the applicant, as a former employee, did not qualify as an informer under its policy.

Issues

  1. Whether the export of unprocessed foodstuffs and agricultural products are zero-rated or exempt supplies under the VAT Act?
  2. Whether the applicant is an informer and consequently entitled to a reward from the respondent?
  3. What remedies are available to the parties?

Orders

  • Application dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

VAT — Zero-Rated Supplies — Exports of Unprocessed Agricultural Products
Exports of unprocessed foodstuffs and agricultural products attract a zero rate of VAT under the Third Schedule paragraph 1(a) of the VAT Act, notwithstanding that domestic supply of the same goods would be exempt under the Second Schedule.
VAT — Conflict Between Exempt and Zero-Rated Supplies — Section 77 VAT Act
Where a supply of goods is covered by both the Second Schedule (exempt supplies) and the Third Schedule (zero-rated supplies), section 77 of the VAT Act provides that the supply shall be treated as being within the Third Schedule.
VAT — Domestic Supply versus Export — Section 18(1) VAT Act
Section 18(1) of the VAT Act, as amended by the VAT (Amendment) Act 2011, clarifies that a taxable supply is one made in Uganda. The Second Schedule dealing with exempt supplies applies to domestic supply, while the Third Schedule dealing with zero-rated supplies applies specifically to exports.
Informer's Reward — Entitlement — Information Leading to Tax Recovery
An informer is entitled to a reward under section 8 of the Finance Act 2014 only where the information provided leads to recovery of tax. Where the information is misconceived and does not result in any tax being recoverable, the informer is not entitled to a reward.
Locus Standi — Informer Seeking Reward
An applicant seeking a reward for information given as an informer has locus standi to bring an application to determine entitlement to the reward, as the tribunal cannot determine entitlement without first determining whether the information was correct.

Legislation cited (22)

  • Finance Act 2014 s.8
  • Tax Procedure Code Act s.74A
  • VAT Act s.4
  • VAT Act s.6
  • VAT Act s.7
  • VAT Act s.18
  • VAT Act s.18(1)
  • VAT Act s.19
  • VAT Act s.19(1)
  • VAT Act s.24
  • VAT Act s.24(4)
  • VAT Act s.77
  • VAT Act Second Schedule para.1(a)
  • VAT Act Second Schedule para.3
  • VAT Act Third Schedule para.1(a)
  • VAT Act Third Schedule para.1(l)
  • VAT Act Third Schedule para.2
  • VAT (Rate of Tax) Order 2005
  • VAT (Amendment) Act 2011 s.9
  • Value Added Tax Regulations 1996 reg.11
  • Whistleblowers Protection Act 2010 s.2
  • Whistleblowers Protection Act 2010 s.19

Cases cited (8)

  • Uganda Revenue Authority v Total Uganda Ltd (Civil Appeal No. 8 of 2010)
  • Matagala Vincent v Uganda Revenue Authority
  • Dima Dominic Poro v Inyani & Another (Civil Appeal No. 0017 of 2016)
  • Birungyi, Barata & Associates v Uganda Revenue Authority (TAT Application No. 16 of 2011)
  • Aisha Tumusiime v Uganda Revenue Authority (TAT Application No. 31 of 2007)
  • Amatheon Agri Uganda Ltd v Uganda Revenue Authority (TAT Application No. 50 of 2018)
  • Wabulungu v Uganda Revenue Authority (TAT Application No. 2 of 2012)
  • Francis Byamugisha v Attorney General, Parliamentary Commission, and Uganda Revenue Authority (HCCS No. 745 of 2013)

Full judgment

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

Okuja v Uganda Revenue Authority (Application No TAT 72 of 2018) 2020 UGTAT 23 (15 October 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.