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Swift Safaris Limited v Uganda Revenue Authority [2026] UGTAT 32

Tribunal · 2026 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application challenging administrative additional income tax assessment arising from disallowed brokerage fees
Decision
Application dismissed; revised tax assessment upheld

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Tribunal held that while brokerage expenses are in principle allowable deductions under section 22(1)(a) of the Income Tax Act where incurred in the production of income, the Applicant failed to discharge the burden of proving the full quantum claimed. The Applicant's reliance on internal payment vouchers without recipient identification, trip linkage, or independent verification was insufficient. The Tribunal further found that the Applicant failed to segregate expenses between operational and non-operational periods during COVID-19 restrictions, rendering the claim unverifiable. The revised assessment of Shs. 124,055,927 was upheld.

Outcome

Application dismissed; revised tax assessment upheld

Facts

Swift Safaris Limited, a passenger transport company operating buses on the Kampala-Mbarara route, was assessed additional income tax of Shs. 124,055,927 after Uganda Revenue Authority disallowed brokerage fees totaling Shs. 541,272,600 claimed for the year 2020. The Applicant operates older buses and relies on independent brokers (touts) at public bus terminals to attract passengers, paying commissions of Shs. 1,000 to Shs. 3,000 per passenger. The brokers are not employees and do not issue receipts. The Applicant recorded payments through internal payment vouchers. URA initially assessed Shs. 174,212,326 but revised it to Shs. 124,055,927 after objection, disallowing brokerage expenses claimed during COVID-19 lockdown periods when public transport was suspended or restricted, and questioning the plausibility of the quantum claimed based on the number of buses, trips, and passenger capacity. The Applicant challenged the assessment before the Tax Appeals Tribunal.

Issues

  1. Whether the Applicant is liable to pay the revised tax assessment of Shs. 124,055,927?
  2. Whether the disallowed brokerage expenses are allowable expenditure incurred by the Applicant in the production of income?
  3. Whether the Applicant's brokerage expenses were excessive and not acceptable in tax standards?
  4. Whether the Applicant provided sufficient evidence to prove the quantum of brokerage expenses claimed?

Orders

  • The Application is dismissed.
  • The revised assessment of Shs. 124,055,927 is hereby upheld.
  • Costs shall follow the event.

Rules and key headnotes

Tax Law — Deductibility of Expenses — Burden of Proof
The burden of proof lies on the taxpayer to prove entitlement to a deduction and to show that an assessment made by the Commissioner is excessive.
Tax Law — Deductibility of Expenses — Requirements under Income Tax Act
For an expense to be deductible under section 22(1)(a) of the Income Tax Act, it must have been incurred wholly and exclusively in the production of income included in gross income, and the taxpayer must provide sufficient evidence of that fact.
Tax Law — Brokerage Expenses — Allowability in Principle
Brokerage expenses incurred by a passenger transport company to attract customers through independent brokers are, in principle, allowable deductions under section 22(1)(a) of the Income Tax Act to the extent that they are incurred in the production of income, as nothing in the Act prohibits such expenses.
Evidence — Tax Records — Sufficiency of Internal Payment Vouchers
While internal payment vouchers are recognised records under section 43 of the Tax Procedures Code Act, their probative value depends on their reliability and detail. Proof of substantial expenditure requires records capable of demonstrating with reasonable certainty that the expenditure was actually incurred, including identification of recipients, linkage to specific transactions, and capability of independent verification.
Tax Law — Deductibility of Expenses — COVID-19 Restrictions
Where a taxpayer claims deductions for a year of income, the law requires that the expenditure be linked to income-producing activity within that period. A taxpayer's failure to segregate expenses between operational and non-operational periods during COVID-19 restrictions renders the claim unverifiable, and evidential uncertainty must be resolved against the party bearing the burden of proof.
Tax Law — Tax Assessment — Presumption of Correctness
A tax assessment is presumed correct until the taxpayer proves otherwise. While a revenue authority's methodology may involve estimation, this alone does not invalidate the assessment where the taxpayer has failed to prove the correct position or demonstrate that the assessment is excessive.

Legislation cited (6)

Cases cited (10)

  • Uganda Revenue Authority v Uganda Consolidated Properties Ltd (Supreme Court Civil Appeal No. 2 of 2001)
  • New Vision Printing & Publishing Corporation v Uganda Revenue Authority (Civil Appeal No. 78 of 1999)
  • Commissioner of Income Tax v Total (U) Ltd (Income Tax Appeal No. 2 of 2006)
  • Kenya Meat Commission v The Commissioner of Income Tax No. 56 of 1967 (reported as case No. 127)
  • J.N. Duggan v Commissioner of Income Tax AIR 1952 BOMBAY 261
  • Commissioner of Income Tax v Buhemba Mines Ltd (Court of Appeal No. 77 of 1955)
  • Commissioner v. Heininger, 320 U.S. 467, 64 S.Ct. 249 (1943)
  • National Cottonseed Products Corp. Vs. Commissioner, 76 F.(2d) 839 (C.C.A. 6th, 1935)
  • Commissioner of Internal Revenue Vs. Isabella Cultural Corporation, G.R. No. 172231, SCRA 556, 563
  • Commissioner of Internal Revenue Vs. General Foods, (Phils.) Inc., G.R. No. SCRA 545, 550

Full judgment

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Swift Safaris Limited v Uganda Revenue Authority 2026 UGTAT 32 (24 April 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.