URA, Warid Lock Horns Over Sh160 Million Court Suit in Uganda

Telecoms

The Commercial Court has stopped the Uganda Revenue Authority (URA) from collecting over sh160m and enforcing other tax collections from Warid Telecoms, pending the final determination of its main suit. This followed an application by Muwema & Mugerwa Advocates, the lawyers representing Warid Telecoms.

The telecom company is disputing URA's orders to Stanbic Bank to pay USH160,918,869 in taxes. Justice Geoffrey Kiryabwire of the Commercial Court also ordered the parties to carry out a reconciliation exercise to determine if any taxes were due and payable to the URA and report back to him on August 26.

Warid also sued the URA's Commissioner of Customs for wrongly taxing its duty-free machinery. The firm also asked the court to compel URA to refund with interest a total of USH172,389,883, which it claimed the tax body forcefully paid itself from the company's general purposes bank account. Warid was referred to as one of the largest investors in Uganda having invested over $200m (over USH400b) in the country. The company further seeks general and punitive or exemplary damages for what it described as URA's illegal and wanton acts that are damaging its operations.

The company told Justice Kiryabwire that the Commissioner of Customs wilfully and unlawfully imposed tax on palisade fencing that is part of its telecommunications plant and machinery, which is exempt from import duty.

WARID also asked the court to permanently stop URA from enforcing the "third party agency notice" that requires its bankers to pay taxes on its (Warid's) plant and machinery or any other enforcement measures against it.

The court was told that between September and October 2007, the finance ministry, granted investment incentives to Warid that its plant and machinery was to be imported free of any duty under the investment incentives by the ministry and the East African Customs Union Common External Tariff. The court heard that the Commissioner of Customs had accepted a list of Warid items to be imported.

The New Vision