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Scovia Gatete Sanyu v Uganda Revenue Authority [2026] UGTAT 9

Tribunal · 2026 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application challenging URA's denial of input tax credit on utilities, following objection decision and partial consent at TAT-guided mediation
Decision
Application dismissed; Respondent's denial of input tax credit upheld; Applicant liable for tax assessment of Shs. 171,868,138

Observed later treatment

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Holding

The Tax Appeals Tribunal dismissed the application and upheld URA's denial of input tax credit on utilities totalling Shs. 171,868,138. The Tribunal held that although the Applicant (landlord) paid the utility bills, the utilities were put to business use by the tenants, not the landlord. Under Section 28(7) of the VAT Act, input tax credit applies only to business use generating taxable supplies. The tenants used electricity to light their shops and attract customers, and used water for cleaning and convenience. The tenancy agreements confirmed tenants' covenant to pay utility charges. The Tribunal found that the Applicant transferred business use to the tenants when renting out the commercial property, and therefore was not entitled to claim input tax credit on utilities consumed by tenants in their respective businesses.

Outcome

Application dismissed; Respondent's denial of input tax credit upheld; Applicant liable for tax assessment of Shs. 171,868,138

Facts

The Applicant owns commercial buildings in downtown Kampala and operates a rental business. URA conducted a tax review and issued an additional VAT assessment of Shs. 217,419,850 for July 2017 to June 2022, disallowing input tax credits. The Applicant objected. During TAT-guided mediation, URA allowed input tax credits on security, insurance, roofing materials, and other expenses totalling Shs. 45,537,313, reducing the liability to Shs. 171,868,138. The remaining dispute concerned input tax credit on utilities (electricity and water). The Applicant argued she paid the utility bills directly to UMEME and National Water, provided bank statements, receipts, and tenancy agreements as proof, and that utilities were necessary for her rental business. URA argued that the utilities were consumed by tenants in their respective businesses, not by the landlord, and that some utility accounts were not in the Applicant's name. URA conducted physical inspections and found that tenants were assigned individual meters and the tenancy agreements required tenants to pay utility charges.

Issues

  1. Whether the Applicant is liable to pay the tax liability of Shs. 171,868,138.
  2. Whether the Respondent was legally justified to reject the Applicant's claims for input tax credit on utilities on the basis that it could not verify the input tax against third party declarations.
  3. Whether the utility expenses (electricity and water) were wholly and exclusively incurred for use in the Applicant's rental business.
  4. Whether the utilities were put to business use by the Applicant (landlord) or by the tenants.

Orders

  • Application dismissed.
  • Costs awarded to the Respondent.

Rules and key headnotes

Value Added Tax — Input Tax Credit — Business Use Requirement
Under Section 28(1) and (7) of the Value Added Tax Act Cap 344, input tax credit is allowed only where the supply or import is for use in the business of the taxable person, and 'business use' applies only to the related business generating a taxable supply.
Value Added Tax — Input Tax Credit — Landlord and Tenant — Utilities
Where a landlord pays utility bills for commercial premises let to tenants, but the utilities are consumed by the tenants in their respective businesses, the landlord is not entitled to claim input tax credit on those utilities because the utilities are not put to use in the landlord's business but in the tenants' businesses.
Value Added Tax — Input Tax Credit — Burden of Proof
The burden of proving entitlement to input tax credit lies squarely with the taxpayer claiming the credit, and the taxpayer must demonstrate that the claimed expenses were wholly and exclusively incurred for use in the taxpayer's business generating taxable supplies.
Tax Statutes — Literal Interpretation — Plain Language Rule
In interpreting tax statutes, courts must look at the plain language of the Act without reading in any assumptions or implications. There is no room for intendment and nothing is to be implied. One can only look fairly at the language used.
Value Added Tax — Input Tax Credit — Substance Over Form
In determining entitlement to input tax credit, the focus is on actual business use and who puts the utilities to business use, not merely on who pays the bills or in whose name the utility accounts are registered. The substance of the transaction prevails over form.

Legislation cited (16)

Cases cited (10)

  • Target Well Control Uganda Ltd v Commissioner General URA (HCCS No. 751 of 2015)
  • Red Concepts Limited v URA (TAT Application No. 36 of 2018)
  • Leds Uganda Limited v URA (TAT Application No. 3 of 2018)
  • Premier Recruitment Limited v URA (TAT Application No. 73 of 2023)
  • Margaret Rwaheru Akiiki & 13945 Others v URA (Civil Suit No. 117 of 2013)
  • Manilla North Tollways Corporation Vs. Commissioner of Internal Revenue C.T.A EB No. 812 of 2012
  • Uganda Revenue Authority v Siraje Hassan Kajura (SCCA No. 009 of 2015)
  • Cape Brandy Syndicate vs Inland Revenue Commissioners (1920) KB 64
  • Enviroserv (U) Limited v URA (TAT Application No. 24 of 2017)
  • Wan'd Telecom Uganda Limited v Uganda Revenue Authority (Civil Appeal No. 24 of 2011)

Full judgment

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

Scovia Gatete Sanyu v Uganda Revenue Authority 2026 UGTAT 9 (5 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.