Wednesday October 11 2017

URA goes to regional court over Entebbe Airport rent

Passengers board a plane at  Entebbe International

Passengers board a plane at Entebbe International Airport. A number of government agencies, including Uganda Revenue Authority, have been directed to pay rent to Civil Aviation Authority. PHOTO BY ANDREW BAGALA 

By EPHRAIM KASOZI

Kampala- Uganda Revenue Authority (URA) has petitioned the East African Court of Justice challenging the payment of rent charged by Civil Aviation Authority (CAA).
It is alleged that on August 28 this year, CAA made incessant demand for rent worth more than Shs5.3b and $52,557.98 against URA in regard to occupancy of various spaces within Entebbe International Airport.
URA uses arrival area and cargo terminal as customs area for carrying out its mandate of management and control of customs including collection of customs revenue.

In the case filed before the regional court, the tax body contends that although CAA is responsible for the establishment, maintenance, development, operation and ownership of aerodromes and may charge fees for rent and concession fees for services and facilities provided, the same power to levy does not extend to the letting out or hiring space to government entities such as the URA for monetary gain.
It is alleged that CAA has threatened to evict URA from the airport to grave prejudice of Customs Administration and management at the airport.

“The decision is contrary to Article 7 of the East African Community treaty in regard to the objective of promoting export oriented economy where there is free movement of persons, labour, services, capital and technology which requires Customs unhindered and unconditional presence at Entebbe International Airport,” reads the court document.
Through its legal department, URA argues that the decision requiring it to pay impedes the full achievement and effective operationalisation of customs unions where the authority has a role to play in managing customs.

“…it is disharmony with the Aviation policies in the rest of the Community partner states, where rent is not charged on the respective revenue administrations for user and occupancy of their International Airports. The decision is further contrary to the role of the aviation in support of other economic activities,” reads the court document.

Regional treaty
URA now wants the regional court to declare unlawful the statutorily obligation to pay rent for spaces occupied and used by its customs arm citing infringement on the provisions of East African Community Treaty.
“Wherefore the applicant (URA) prays to this court for orders that the decision not be acted upon by the CAA, the Parliament of Uganda or any other person or authority to the prejudice of URA,” says the court document.

URA, which has since December 2000, occupied and used spaces within Entebbe airport is one of the government agencies that were directed by the Parliamentary committee on Statutory Authorities and State Enterprises to pay CAA over Shs30 billion that accumulated for over 10 years.
Other agencies include the ministry of Defence, ministry of Finance, ministry of Agriculture, ministry of Foreign Affairs and Uganda Wildlife Education Centre among others.

No tenancy agreement
However, URA contends that, CAA, in absence of a duly sealed tenancy agreement, demanded for the rent due which is rejected as untenable under the EACCMA.
URA alleges that the CAA decision is contrary to the regional treaty for impeding the facilitation of passenger and cargo air services especially customs clearance at Entebbe International Airport.
Meanwhile, the court has asked the Attorney General to file a response within 45 days warning that in default, the reference will be heard and determined in his absence.

ekasozi@ug.nationmedia.com

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