Uganda Parliament seeks legal clarity on URA’s backdated tax demand
The matter came before the House on Tuesday, November 3, after Karim Masaba, the Industrial Division Mbale City MP, raised concerns that URA was demanding additional taxes from oil marketing companies and sugar traders for transactions conducted between July 1 and August 28, 2026, before the Excise Duty (Amendment) Act, 2026 was assented to and published in the Uganda Gazette.
Parliament is expected to receive the Finance Ministry’s position on the excise duty dispute next Tuesday, following the scheduled consultation with the Attorney General.
KAMPALA - Parliament has asked the Attorney General to clarify the legality of Uganda Revenue Authority’s (URA) decision to demand revised excise duty payments retrospectively from businesses, following complaints that some companies have had their bank accounts frozen over taxes dating back to July.
The matter came before the House on Tuesday, November 3, after Karim Masaba, the Industrial Division Mbale City MP, raised concerns that URA was demanding additional taxes from oil marketing companies and sugar traders for transactions conducted between July 1 and August 28, 2026, before the Excise Duty (Amendment) Act, 2026 was assented to and published in the Uganda Gazette.
Masaba told Parliament that URA had issued tax demand notices and bank agency notices to affected businesses, with some accounts reportedly frozen as the authority seeks to recover the additional revenue.
He asked the Ministry of Finance to intervene and direct URA to halt the enforcement pending clarification of the law, warning that businesses should not be required to pay taxes for a period when the revised rates had not yet become law.
“URA is demanding taxes that were supposed to have been collected from the 1st of July to the 28th of August,” Masaba said.
Responding, Henry Musasizi, the Minister of Finance, Planning and Economic Development, acknowledged that Masaba had accurately presented the circumstances surrounding the law but said URA was implementing the legislation as enacted by Parliament.
President Yoweri Museveni assented to the Excise Duty (Amendment) Act, 2026, on August 20 and published it in the Uganda Gazette on August 28, but its commencement clause sets the effective date as July 1, 2026.
URA subsequently issued a public notice on September 23, informing taxpayers that the amended tax provisions had taken effect from July 1 and directing them to review their returns and declarations for July and August to reflect the revised provisions.
Musasizi said the authority was acting within its mandate to administer taxes in accordance with the laws passed by Parliament
However, he expressed reservations about applying tax laws retrospectively, raising a question of interpretation between the legislation's commencement date and the principle against retrospective taxation.
He said the ministry had already written to the Attorney General seeking a legal interpretation and scheduled a meeting with him for Thursday, November 5
Musasizi asked the Speaker to allow the ministry one week to study the matter and report back to Parliament on Tuesday, November 10, after consultations with the Attorney General.
Meanwhile, Joseph Ssewungu, the Kalungu County West MP, raised a separate concern over traders who he said were being required to pay taxes in US dollars on imported commodities, despite Parliament having rejected dollar-denominated taxation
He argued that exchange-rate movements could increase the tax burden on traders who purchase goods abroad and bring them into Uganda.
However, Musasizi said the matter was a new issue requiring separate consideration, rather than a clarification of the retrospective excise duty concerns.
Parliament is expected to receive the Finance Ministry’s position on the excise duty dispute next Tuesday, following the scheduled consultation with the Attorney General.