Uganda: Ura sued over new tax law for SMEs

The Uganda Revenue Authority (URA) has been sued for allegedly failing to bring about tax cuts for small and medium-sized enterprises (SMEs).

The petitioners, Open Forum Initiative, a political advocacy group on citizen tech and technology, said parliament amended the income tax law last year.

They go on to say that the change has significantly reduced alleged tax rates for small businesses with gross sales less than Shs 150 million and that the same change should go into effect on July 1, 2020.

However, to their surprise, the petitioners say that the tax authority has not followed the change and has kept the old taxes.

The petitioner claims that once a legal provision is repealed it traditionally no longer exists and has no legal force.

“Despite the fact that the change ushered in a new regime, the Uganda Revenue Authority has not changed the rates in its system. As a result, taxpayers are paying the alleged tax for fiscal year 2020/21 at the old rates that have been repealed and are a lot higher, “claim the petitioners.

They add: “The presumed tax levied for 2020/21 was wrongly imposed because the assessment was made on the basis of a non-existent law that violates Article 152 (1) of the Constitution. This is illegal. “


Through their lawyers from Atigo & Co. Advocates, the petitioners are now demanding that the office of the Commissioner General carry forward the taxes that have been inflated by the SMEs to the next financial year.

They also want the tax authority to make a statement reflecting their commitment to the Charter of Taxpayers’ Rights.

The petitioners also ask that the panel, in consultation with civil society, submit a letter of intent on the formulation of taxes, tax laws and SME relations.