Wakilii

Safe Gears Limited v Uganda Revenue Authority [2026] UGTAT 5

Tribunal · 2026 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application challenging additional customs tax assessment following disallowance of Transaction Value Method
Decision
Additional customs assessment set aside; refund ordered with interest

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Tribunal held that URA unlawfully rejected the Transaction Value Method for customs valuation. The alleged inconsistencies in documentation (Incoterms, payment terms, unit descriptions, and telegraphic transfer references) were not shown to render the declared price untrue, fictitious, or unverifiable. URA's resort to reference values and the transaction value of similar goods without exhausting reasonable verification measures violated Section 122 of the East African Community Customs Management Act and the WTO Customs Valuation Agreement. The additional assessment of UGX 7,008,740 was set aside and the Applicant awarded a refund with interest and costs.

Outcome

Additional customs assessment set aside; refund ordered with interest

Facts

Safe Gears Limited, a Ugandan company importing industrial safety gear, had consistently imported similar goods from a Chinese supplier since 2019, with customs clearance using the Transaction Value Method. On 25 March 2024, the Applicant imported a consignment of safety gear and made a self-assessment declaration paying UGX 43,999,671 in taxes. URA queried the entry, initially citing that declared values for two glove items were below reference values. A second-level officer then identified inconsistencies in documentation (CIF vs C&F Incoterms, payment term variations, unit pricing described as 'sets', and a telegraphic transfer lacking invoice reference), rejected the Transaction Value Method, and applied an alternative valuation method, resulting in an additional assessment of UGX 7,008,740. The Applicant appealed internally without success, paid the tax under protest, and brought this application to the Tax Appeals Tribunal.

Issues

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

Orders

  • Application allowed.
  • Additional assessment of UGX 7,008,740 set aside.
  • Respondent to refund UGX 7,008,740 to the Applicant with interest computed in accordance with the Tax Procedures Code Act 2014.
  • Costs of the application awarded to the Applicant.

Rules and key headnotes

Customs Valuation — Transaction Value Method — Primacy and Mandatory Application
The Transaction Value Method under Section 122(1) of the East African Community Customs Management Act and the Fourth Schedule is the primary and mandatory basis for customs valuation. Alternative methods may only be applied sequentially where the transaction value cannot be determined, and customs authorities bear the burden of demonstrating cogent reasons, grounded in evidence, to doubt the truth or accuracy of the declared value before rejecting it.
Customs Valuation — Rejection of Transaction Value — Grounds and Standard
Section 122(4) of the East African Community Customs Management Act empowers customs to reject the transaction value where there are reasons to doubt the truth or accuracy of the particulars or documents produced. However, any rejection must be legally justified and consistent with the WTO Customs Valuation Agreement. Customs must produce objective, credible material to challenge the declared value and must exhaust reasonable verification measures before resorting to alternative valuation methods.
Customs Valuation — Reference Values — Impermissible Use
Reference values derived from importations by other traders are not recognized under the Transaction Value Method and cannot displace actual transaction prices supported by documentary evidence. Mere low pricing compared to other importers does not, by itself, justify rejection of the transaction value. To hold otherwise would convert the transaction-value system into a minimum price regime, contrary to Article VII of GATT and the WTO Customs Valuation Agreement.
Customs Valuation — Documentary Inconsistencies — Materiality Requirement
Inconsistencies in Incoterms, payment terms, or other documentation do not automatically justify rejection of the transaction value. Customs must demonstrate that such inconsistencies are material in the sense of rendering the declared price untrue, fictitious, or unverifiable, or that they result in a demonstrable tax loss. Minor variations in commercial documentation, absent evidence of fraud or manipulation, do not satisfy the statutory threshold for rejecting the Transaction Value Method.
Tax Appeals — Burden of Proof — Evidential Burden Shift
While Section 19 of the Tax Appeals Tribunal Act places the legal burden on a taxpayer challenging an assessment to prove on a balance of probabilities that the assessment is excessive or erroneous, once the taxpayer adduces credible evidence supporting its position, an evidential burden shifts to the tax authority to justify the assessment, particularly where the authority seeks to discard the statutorily preferred method of valuation.

Legislation cited (13)

  • East African Community Customs Management Act 2004 s.122
  • East African Community Customs Management Act 2004 s.122(1)
  • East African Community Customs Management Act 2004 s.122(4)
  • East African Community Customs Management Act 2004 s.122(5)
  • East African Community Customs Management Act 2004 s.123
  • East African Community Customs Management Act 2004 s.249
  • East African Community Customs Management Act 2004 Fourth Schedule
  • Tax Appeals Tribunal Act s.19
  • Tax Procedures Code Act 2014 s.26
  • Evidence Act Cap 6 s.101
  • Constitution of Uganda 1995 Article 28
  • General Agreement on Tariffs and Trade 1994 Article VII
  • General Agreement on Tariffs and Trade 1994 Article VII(2)(a)

Cases cited (12)

  • Royal Electronics Ltd v Uganda Revenue Authority (TAT Application No. 37 of 2017)
  • Rose of Sharon Enterprises Ltd v Uganda Revenue Authority (TAT Application No. 8 of 2018)
  • Uganda Revenue Authority v Balondemu David (Civil Appeal No. 0002 of 2023)
  • Makula International v His Eminence Cardinal Nsubuga & Another (UGSC 8 April 1998)
  • Commissioner General of Uganda Revenue Authority v Testimony Motors Limited (Court of Appeal Civil Appeal No. 33 of 2014)
  • Testimony Motors Ltd v Commissioner of Customs, Uganda Revenue Authority (HCCS No. 139 of 2011)
  • Century Bottling Company Ltd v Uganda Revenue Authority (HCCA Nos. 51 & 64 of 2022)
  • Camusat Kenya Limited v Commissioner of Customs & Border Control (Tax Appeal No. 525 of 2020)
  • Cadbury Kenya Limited v Commissioner of Customs & Border Control (Tax Appeal No. 130 of 2019)
  • Williamson Diamonds Ltd v Commissioner General ((2008) 4 TTLR 67)
  • Cooper Motor Corporation (U) Ltd v Uganda Revenue Authority (TAT Application No. 67 of 2018)
  • Commissioner of Customs, Calcutta v South India Television (P) Ltd, (2007) 6 SCC 373

Full judgment

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Safe Gears Limited v Uganda Revenue Authority 2026 UGTAT 5 (19 January 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.