| On 22nd July 2021, the Tax Appeals Tribunal once again issued a decision in favour of URA in the matter of Safari Clothing (Uganda) Ltd, the Applicant Vs URA, the Respondent. URA issued an assessment of UGX 1,860,721,939/= being Income Tax and Value Added Tax against Safari Clothing Ltd to which the Applicant objected the said assessments and consequently lodged an application in the Tax Appeals Tribunal seeking extension of time within which to apply for review at the Tax Appeals Tribunal. The Applicant submitted that it’s delay was caused by failure of the Respondent to reply in time to its appeal for review. They further contended that the Respondent applied a 25% profit margin instead of 5%, and an additional VAT assessment of UGX 516 million, which if unchallenged would cause a financial loss of UGX 383 million and UGX 796 million from the additional income assessments by the Respondent. In response, URA filed an affidavit opposing the Application on grounds that the said application does not disclose a sufficient cause to warrant extension of time.In its ruling, TAT mentioned that the Applicant made it difficult for the Tribunal to help them as a taxpayer, since they did not disclose dates when they were served the objection decisions. TAT added that having been served with the objection decisions, the Applicant ought to have filed a matter in the Tribunal and not gone back to the respondent for a review. The Tax Appeals Tribunal agreed with the URA, and dismissed the Application with costs for failure to disclose a sufficient cause to justify the application for extension of time. The implication of the above decision is that the outstanding tax liability as assessed by the URA against Safari Clothing (U) Ltd is collectable and thus we advise that immediate recovery measures are commenced before the Applicant attempts to obtain an injunction from court. Correspondence by Barbara Nahone, Manager Income Tax Litigation.Legal Services and Board Affairs |
