URA stopped from collecting sh4.3b tax
Oct 07, 2009
THE Commercial Court has stopped the Uganda Revenue Authority (URA) from collecting over sh4.3b as Value Added Tax (VAT) from insurance brokers, saying the law exempted them from paying the tax.<br>
By Hillary Nsambu
THE Commercial Court has stopped the Uganda Revenue Authority (URA) from collecting over sh4.3b as Value Added Tax (VAT) from insurance brokers, saying the law exempted them from paying the tax.
This was in response of an application which AON Uganda, an insurance agency, sought to stop URA from demanding the tax.
The insurance brokers appealed to the Commercial Court after the URA rejected their plea to cancel the VAT assessment. The company also accused the URA of abuse of authority.
Ali Ssekatawa, a legal officer who represented URA, had asked the court to dismiss the application, saying URA had exercised its powers under the law.
Ssekatawa had also asked the court to order the insurance brokers to take their complaint to the Tax Appeals Tribunal, which Justice Geoffrey Kiryabwire rejected.
Kiryabwire said the Constitution stipulates that the courts shall apply substantive justice without due regard to technicalities.
He said since insurance agents and brokers are insurance intermediaries, the VAT (Amendment) Bill 2009, now in Parliament, should specifically mention insurance companies, re-insurance companies and insurance agents.
He said comparing the proposed amendment with the best legislative practices in the European Union and Kenya, the proposed amendment did not go far enough.
The judge criticised the URA for not scrutinising the law before they carried out their 2008 special audit of the company.
“I am inclined to agree with the URA that because of the lack of a proper definition of what insurance services are, one has to derive the definition from how insurances and insurance agents operate,†Kiryabwire said.
THE Commercial Court has stopped the Uganda Revenue Authority (URA) from collecting over sh4.3b as Value Added Tax (VAT) from insurance brokers, saying the law exempted them from paying the tax.
This was in response of an application which AON Uganda, an insurance agency, sought to stop URA from demanding the tax.
The insurance brokers appealed to the Commercial Court after the URA rejected their plea to cancel the VAT assessment. The company also accused the URA of abuse of authority.
Ali Ssekatawa, a legal officer who represented URA, had asked the court to dismiss the application, saying URA had exercised its powers under the law.
Ssekatawa had also asked the court to order the insurance brokers to take their complaint to the Tax Appeals Tribunal, which Justice Geoffrey Kiryabwire rejected.
Kiryabwire said the Constitution stipulates that the courts shall apply substantive justice without due regard to technicalities.
He said since insurance agents and brokers are insurance intermediaries, the VAT (Amendment) Bill 2009, now in Parliament, should specifically mention insurance companies, re-insurance companies and insurance agents.
He said comparing the proposed amendment with the best legislative practices in the European Union and Kenya, the proposed amendment did not go far enough.
The judge criticised the URA for not scrutinising the law before they carried out their 2008 special audit of the company.
“I am inclined to agree with the URA that because of the lack of a proper definition of what insurance services are, one has to derive the definition from how insurances and insurance agents operate,†Kiryabwire said.