In the Judgment dated 31st March 2023 delivered by Sekaana J, wherein the parties are Fred Muwema V Attorney General and Uganda Revenue Authority HCCS No 120 of 2019, the court has reaffirmed the long-standing principle underlying the revenue law and taxation that Tax is a creature of a statute and that No tax can be imposed except by way of an Act of Parliament.
The court, while resolving one of the key issues was whether the amount of UShs.4,314,906,176/= (Uganda Shillings Four Billion Three Hundred Fourteen Million Nine Hundred Six Thousand One Hundred Seventy Six Only) awarded by the Supreme Court in SCCA NO.04 of 2017 is a tax or tax due against the Plaintiff / Applicant made the filing observations;
1. No Act is in existence that gives power to any Court to impose a tax; not the Judicature Act, the Uganda Revenue Act, the Income Tax Act, The Tax Procedure Code Act nor any other legislation.
2. Uganda Revenue Authority (URA) desire to achieve the set targets of generating more revenue internally should not be pursued without regard to need to ensure that justice is done to the taxpayer or labeling every amount due from court award as a tax recoverable as such.
3. There is special procedure for recovery of taxes under the Tax Procedure Code and applicable to every recovery of taxes. Therefore, it behooves the court to only proceed to allow recovery of taxes through that procedure.The recovery of court awards like in the present case ought to be made in accordance with the procedures of execution strictly.
4. That URA misapplied the realization of the Court award by choosing to apply their statutory powers under the tax laws like the Income Tax Act and Tax Procedure Code Act wrongly and illegally hence the monies due was recoverable as court award not as Tax.
Therefore, the import of this judgement is that there is No TAX that can be imposed save with the authority of parliament through an Act of parliament under Article 152 of the constitution and thus Tax is a creature of a statute.
Simon Nyakoojo-The Author is a Senior Legal Writer at the Judicial Sound Exponent, For a copy of the judgement or inquiries, please email us via [email protected] or [email protected]