Tax tribunal clears URA to collect Shs21b from Game Discount World
A URA employee on duty recently. Tax tribunal has given URA green light to collect the tax liability owed to it by Game Discount World. PHOTO | RACHEL MABALA
The Tax Appeals Tribunal (TAT) has awarded Uganda Revenue Authority (URA) the right to collect a tax liability of more than Shs21b from Game Discount World (Uganda) Ltd, the applicant.
Game Discount World (Uganda) Ltd, lodged an application NO. 25 of 2021 with TAT against URA’s decision of imposing the tax liability.
The applicant was challenging a customs post clearance audit wherein it was established that the Game Discount World omitted several incidental costs during the importation of goods from Masstores (pty) Ltd trading as Mass discounters, a fellow subsidiary incorporated in South Africa.
On May 5, 2021, when the matter came up for hearing, URA raised a preliminary objection to the effect that the application was time barred having been lodged outside the mandatory forty-five days.
URA submitted that under Section 230 (1) of the East African Community Customs Management Act (EACCMA), 2004, provides that; “A person dissatisfied with the decision of the commissioner under section 229 may appeal to a tax appeals tribunal established in accordance with section 231.
Section 230(2) of the EACCMA provides that; a person intending to lodge an appeal under this section shall lodge the appeal within forty-five days after being served with the decision, and shall serve a copy of the appeal on the Commissioner.”
According to a statement, URA further contended that the commissioner made the decision on September 9, 2020 and Game Discount World (U) Ltd lodged its application for review on March 6, 2021, way out of the mandatory 45 days within which one ought to lodge an Application for review.
TAT agreed with URA that the Application was time barred and dismissed the Application, giving URA the green light to collect the tax liability owed to it by Game Discount World
Dire times
This judgment comes at a time when URA is projected to have closed its revenue collection calendar with a deficit projected to be in a tune of about Shs3 trillion which is slightly more than a quarter of Shs8.5trillion the country needs to pay of it domestic debt.
According to URA Commissioner General, Mr John Musinguzi, currently URA is collecting on average 47 per cent of the national budget at a tax to GDP ratio of 13 per cent, which is below the average sub-Saharan African performance of 16 performance . It is also below the Organisation of Economic Cooperation and Development (OECD) average of 34 per cent in Africa. Morocco, Seychelles, South Africa and Tunisia are at more than 25 per cent Tax-to-GDP ratio.
“For Uganda to attain self-sufficiency, we need to at least double our tax to GDP ratio from the current 13 per cent to 26 per cent and I believe it can be attained. By the end of our current corporate plan in 2024/25, we are projecting to have collected close to Shs 28.2 Trillion,” Mr Musinguzi wrote in an internal newsletter publication.
How the tax tribunal works
The Tribunal was set up by an Act of Parliament as a specialised court to provide taxpayer with easily accessible, efficient and independent arbitration in tax disputes with URA. It is a quasi-judicial institution which operates as an independent body with its independence guaranteed by law.
Any taxpayer aggrieved by a taxation decision may apply to the Tribunal for review of the decision. For instance, an appeal can be made to the commissioner general against a decision made by URA and if the decision of the commissioner general is not satisfactory then the complainant can petition the Tribunal.
Taxation issues
Tax Appeals Tribunal, according to URA is an important facet of taxation because it is where issues concerning taxation can best be interpreted.
Membership of the Tribunal highly considers knowledge in accounting, law and taxation.
Additionally, cases are expeditiously handled and disposed thus realising tied up revenues. Having a Tax Appeals Tribunal, is best practice in all parts of the developed world.
The Tribunal gives a timeframe of 30 days within which an application can be filed. However, an extension can be granted if the complainant fully explains why they may need an extension. After an application has been filed, URA or the commissioner general are allowed up to 30 days within which they are expected to file a response. Just like court both parties are given a chance to be listened to after which a judgment is passed.
