The Court of Appeal has ordered Uganda Revenue Authority (URA) to refund shs 25.3 billion it initially obtained from the National Social Security Fund (NSSF) following a decision of the Tax Appeals Tribunal that upheld a tax assessment of shs45 billion against the Fund.
URA had initially issued a tax assessment of shs 84 billion and NSSF was required to pay 30 percent of the tax assessed before the dispute was heard by the Tax Appeals Tribunal.
The High Court however overturned the assessment which meant that URA was required to refund the 30 percent with accrued interest. URA has never refunded the money.
In his ruling, Justice Oscar Kihika of the Court of Appeal dismissed an application by URA in which it opposed the refund noting that the tax body had failed to prove that its substantive appeal against an earlier decision of the High Court has a likelihood of success.
“The applicant (URA) is in the process of obtaining leave to appeal, having filed a Notice of Appeal. However, having failed to establish whether or not the intended appeal has a likelihood of success, this Court is of the view that the balance of convenience does favour the respondent (NSSF) which has a judgment in its hands. I find, therefore, that the applicant has failed to establish that the appeal will be rendered nugatory if an order for stay of execution is not issued,” Justice Kihika ruled.
He also found that there was no evidence of irreparable damage that URA could suffer in the event that a stay of execution was not granted, in response to the tax body’s submissions.
The judge said that on the contrary, NSSF stood to suffer substantial loss since they have been in court since 2014 and since obtaining judgment in its favour, URA had without sufficient cause, held onto the 30% that was paid in 2014.
“In the instant case, there is no evidence whatsoever that there is an impending or imminent threat of execution. No warrant of execution has been issued, let alone, even applied for. I have found no evidence of any threat of execution on record. There is no evidence that if the order is not stayed the application for leave to appeal and the appeal would be rendered nugatory.”
“Given the findings above, I find no merit in the application and order that the application is dismissed,”Justice Kihika said.
The acting Managing Director Patrick Ayota welcomed the decision saying that the funds will be invested to earn a return for the members.
“This ruling gives us more confidence as we pursue the substantive case through the courts that our decision will be vindicated,” he said.
