Court gives Warid, URA two weeks to settle tax row

Sep 08, 2009

JUSTICE Geoffrey Kiryabwire of the Commercial Court has given Warid Telecom and the Uganda Revenue Authority (URA) two weeks to settle a tax dispute.

By Hillary Nsambu

JUSTICE Geoffrey Kiryabwire of the Commercial Court has given Warid Telecom and the Uganda Revenue Authority (URA) two weeks to settle a tax dispute.

Warid sued the tax-collector for wrongly assessing it and taxing its duty-free machinery. It also sued URA for illegally attaching its general purpose account in Stanbic Bank and paying itself the disputed taxes.

The company also sought a court order compelling URA to refund sh172,389,883 it enforced on it and paid itself from its bank account.

The case had come up for hearing when Fred Muwema and Kiggundu Mugerwa, the lawyers representing Warid, asked for time to reach an agreement.

“I shall give you the two-week adjournment, but it should be the last one,” the judge warned. The court had recently stopped URA from enforcing the tax against Warid pending the final determination of its main suit.

This followed an application by Warid’s lawyers who argued that the company would suffer damages if the URA were left to collect the taxes before the case was concluded.

The court also ordered the parties to carry out a reconciliation exercise to determine if there were any taxes payable to the URA and report to court.

The Warid lawyers said their client was one of the largest investors in Uganda, having invested over $200m (over sh400b) in foreign direct investments that include public service and infrastructure.

The company alleged that the commissioner of customs unlawfully imposed tax on fencing, which is part of its telecommunication plant and machinery and is, therefore, exempt from import duty.

Warid also asked the court to stop the URA from enforcing the “third party agency notice” that requires its bankers to pay taxes on its plant and machinery.

Warid telecom is part of Warid International, the Abu Dhabi Group based in the United Arab Emirates. The group also runs real estate business, banking, insurance and security in the United Arab Emirates, Pakistan and Africa, with assets amounting to $10b (sh17,000b).

Warid launched its operations in Uganda on January 9, 2008.

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