# Tags

Lawyers Accuse Uganda Revenue Authority of Contempt for Ignoring Court Ruling on Vehicle Taxation

Share this article

A group of lawyers is accusing the Uganda Revenue Authority (URA) of contempt of court for not adhering to a 2023 Court of Appeal ruling. This ruling directed URA to value imported vehicles using the transaction value method rather than the fallback method.

A group of lawyers that challenged the tax collection body, the Uganda Revenue Authority (URA) over its failure to abide by a 2023 Court of Appeal ruling have accused the taxman of contempt of court.

The Court of Appeal ruling had directed the taxman to have imported motor vehicles valued using the transaction value method instead of the fallback method.

The lawyers; Phillip Karugaba, Matovu Farook Haruna, Lillian Drabo, Anthony Odur, William Mubumuza, and Peter Arinaitwe are set to meet with URA on Tuesday, June 11, 2024 over the matter.

In their application to the court of appeal, the lawyers want URA’s commissioner customs to be committed to civil prison for contempt of a court order dated 23rd March 2023 issued by the appeals court on the matter.

They also want URA to be ordered to pay a fine for contempt of court.

“In the interests of tax equity and justice, the Respondent (URA Commissioner Customs) be ordered to make a refund to each taxpayer what was unlawfully assessed for taxes on imported cars based on the Fall-Back Method, since 7 August 2013, the date of the orders of Hon. Justice Madrama Izama given in the High Court matter from which this appeal arose,” the city lawyer’s application reads in part.

On 7th August 2013, Justice Christopher Madrama Izama ruled in favor of the lawyers and held among others that; “A declaration issues that the directive of the Commissioner Customs Uganda Revenue Authority, suspending the operation of the transaction value method, is unlawful to the extent that it excludes the application of the transaction value method for assessment of customs duty in every case of imported used vehicles.”

URA appealed the decision to the Court of Appeal, which appeal was dismissed on 23rd March 2023.

The lawyers say that URA has neither obtained a stay of execution of the judgement and decree of the Court nor lodged its appeal with the Supreme Court.

“In the absence of a stay, the URA Commissioner in charge of customs is required to comply with the decision of the High Court and Court of Appeal, especially as it relates to the method that the Respondent uses to determine the customs values of imported used motor vehicles.”

“The Respondent (URA) is still relying upon the Fall-Back Method to the exclusion of the Transaction Value Method, contrary to the orders against it.”

URA said it has arranged for a meeting with the lawyers on June 11 to discuss the matter in detail.

“URA takes cognizance of the issues raised in your letter and would like to invite you for a meeting to discuss this matter in detail on Tuesday, 11th June, 2024 at 10:30am on 17th Floor Boardroom. This meeting will provide us an opportunity to understand the basis of your information and verify the current custom practices relating to imported cars,” reads URA’s letter to lawyers signed by the Authority’s Commissioner Legal Services and Board Affairs, Catherine Donovan Kyokunda.

The letter further reads: “We believe that an open and transparent discussion about this issue is essential to build trust and maintain a good relationship between URA and the public.”

Justice Catherine Bamugemereire’s ruling implied URA would have to set import duty rates based on the total amount paid (transaction value) for imported cars instead of using estimates of the cars’ fair market value.

For example, if an individual’s cost of importing a Subaru car is $1,000, URA is mandated by law to use the invoice of $1,000 to determine the tax instead of using its own estimates in its system as is the case today.

There have been instances where one, for example, imports a Subaru of 2001 at $2,000 and another person imports a similar car at $1,500 but both pay the same amount of tax.

At the time, URA said it could hardly ascertain the transaction value of the imported vehicles due to large scale forgery of invoices and receipts.

Value guide

Currently, URA has its own ‘value guide’ which its officials use to levy uniform taxes regardless of the cost of the car and the year in which it was manufactured.

The court ruling effectively stopped URA from using its controversial tax assessment system on imported vehicles.

However, URA has continued to use the outlawed method despite appellate courts rejecting the tax body’s appeals.

The lawyers say that the essential considerations for “contempt of court have been met in this case that is to say, there is an order of this Honourable Court, the Respondent is aware of the order and has the ability to comply with the order, the Respondent has violated the order of this Court without just cause or excuse for the violation.”

0 0 votes
Article Rating
Notify of

Inline Feedbacks
View all comments
Would love your thoughts, please comment.x