Court dismisses case challenging income tax

What you need to know:

  • Open Forum Initiative (TOFI), in its application had contended that their delay to file the case was due to the Covid-19 restrictions that put the country under lock and key, which made it impossible for them to access the gazette regulations and prepare for their case adequately.

KAMPALA. The High Court has dismissed an application with costs in which activists had sought for an extension of time to challenge the legality of the Income Tax (Rental Rates Regulations on rental properties along the roads, lanes or streets) alleging that proper legislative procedures were not followed.

Justice Musa Ssekaana stated that the application that was filed against the Attorney General (AG) and Uganda Revenue Authority (URA) came through late for judicial review since the regulations were made on March 13, 2020.

“This application was filed on September 7, six months after the stipulated statutory three months period,” Justice Ssekaana ruled.

Open Forum Initiative (TOFI), in its application had contended that their delay to file the case was due to the Covid-19 restrictions that put the country under lock and key, making it impossible for them to access the gazette regulations and prepare for their case adequately.

However, the judge declined TOFI's submissions stating that he did not find the Covid-19 restrictions excuse a good cause to grant the extension of time, citing that the court registries were open to ensure that matters of public interest were filed and heard.

“Be as it may, the lockdown restrictions were lifted in June 2020 which could have enabled the applicant (TOFI) to file its application well within the prescribed time. If the applicant wanted to invoke the jurisdiction of this court it should have come at the earliest reasonably possible opportunity,” the judge reasoned.

Court further noted that URA was wrongly brought to court thus the Attorney General was the proper party to represent the Minister and not the implementing agency.

“The act of making the impugned regulations was legislative and could not in any way be imputed on the respondent (URA) and the applicant ought to have known better that the regulations under challenge were made under the hand of the Minister of Finance,” the judge ruled.

In their main suit, TOFI had contended that the passing of the regulations did not obtain Parliament approval thus seeking court to quash the Income Tax (rental rates), Regulations 2020.

“The passing of the regulations did not follow the rightful procedure of obtaining Parliamentary approval as required by statutory instruments made under Section 5 of the income Tax as amended,” reads in part the court document.

Adding: “The continued existence of the rental rates (income tax) regulations, 2020 is an illegality which ought not to be pardoned by this honorable court and any law-abiding citizen.”

TOFI contends that Finance minister Matia Kasaija, in exercise of his powers under section 164 of the Income Tax Act made the impugned rental rates regulations, 2020, prescribing rates on rental properties along roads, lanes and streets.

“An order to quash the income tax (rental rates) published in the Uganda gazette dated March 13, 2020, the same having been made illegally by the honorable minister of finance, purportedly under Section 164 of the Income Tax without the approval of Parliament,” Mr Emmanuel Ajai, the executive director of TOFI states in his affidavit to support the suit.


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