By Laura Nataline Nagaba
The Uganda Revenue Authority (URA) has reported a 10% reduction in the number of tax objections filed in the 2023/2024 financial year. The reduction, from 45% to 35%, is attributed to proactive measures taken by the authority to enhance tax assessments and improve dispute resolution processes.
In the previous financial year, URA recorded a total of 19,970 objections, with the disputed amount totalling UGX 207,511,643,031 and the discharged amount reaching UGX 253,737,199,955. The discharge rate stood at 35%, with resolutions typically taking an average of 57 days. Disputed cases were resolved through one of three outcomes: disallow, allow, or partial conclusion.
Ruth Anne Agwang, the Manager of Objections at URA, attributes the decrease in objections to the authority’s ongoing efforts to sensitize key stakeholders and implement robust feedback mechanisms.
“We are committed to improving the quality of assessments,” Agwang said, adding that the URA is encouraging its assessment team to avoid making unfounded claims based on incorrect facts or legal misunderstandings.
According to Agwang, the most common reasons for tax objections include discrepancies arising from unreconciled audit findings, lack of awareness about tax obligations, and differences in the interpretation of tax statutes. The taxes most often disputed include Income Tax, Value Added Tax (VAT), Pay As You Earn (PAYE), local excise duty, and withholding tax.
Agwang also emphasized the importance of filing accurate and truthful returns. “We encourage taxpayers to ensure their returns reflect the true state of their business activities,” she said.
For cases where disputes escalate to court, Agwang advocates for out-of-court settlements.
“Not only do these settlements save time and resources, but they also lead to a win-win outcome for both the taxpayer and the authority,” she explained.
The legal framework for objections and appeals in Uganda includes the Tax Procedures Code Act 2014, the East African Community Customs Management Act 2004, and the Tax Appeals Tribunal Act, Cap 345.
Under the current regulations, taxpayers dissatisfied with an assessment have 45 days to file an objection. If unresolved, they can pursue alternative dispute resolution procedures and escalate their appeals to the Tax Appeals Tribunal, the High Court, the Court of Appeal, and ultimately the Supreme Court.
By promoting out-of-court settlements and encouraging accurate reporting, URA aims to resolve tax disputes more efficiently, ultimately benefiting both the taxpayers and the tax authority.
