Brief Facts:
The ruling was in respect of an Application challenging VAT treatment of UGX 67,539,443 and UGX 4,967,460 arising out of the treatment of travel insurance and the administration of medical services fund, respectively.
The Applicant is a private limited company incorporated in Uganda and regulated by the Insurance Regulatory Authority to provide insurance services. The Respondent carried out an audit on the Applicant for the period September 2014 to December 2017 and consequently issued a VAT assessment against the Applicant, who filed an Application for review in the Tax Appeals Tribunal.
Issues for Determination:
- Whether the Applicant is liable to pay VAT and interest on travel insurance premium and on the medical fund administration fee?
- What remedies are available to the parties?
Tax Appeals Tribunal Decision:
- Where an insurance policy provides for the likelihood of an event affecting one’s health, the said policy is one of health insurance. The provision of travel insurance by the Applicant is a provision of health insurance services.
- The provision of travel insurance is akin to the provision of health insurance services and is thus an exempt supply under the VAT Act. However, the gold cash policy is not a supply of health insurance and is thus not an exempt supply.
- The gold cash policy involves a client depositing money into a fund that does not constitute a premium, and the client is entitled to a refund of the money that is not utilized at the end of the year.
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