A policy advocacy group has dragged the Uganda Revenue Authority (URA) to court, accusing the latter of refusing to implement a Parliament directive lowering taxes for Small and Medium Enterprises (SMEs).
Open Forum Initiative, in its petition, asserts that Parliament amended the Income Tax Act last year and reduced the presumptive tax rates applicable to small businesses with a gross turnover of less than Shs150m.
The petitioner claims that whereas the amendment became operational on July 1, 2020, Uganda Revenue Authority has since maintained the old charges against the payers.
They aver that traditionally, once a provision of the law has been repealed, it becomes non-existent and does not hold any force of law.
“Despite the fact that the amendment ushered in a new regime, Uganda Revenue Authority did not change the rates in its system. As a result, presumptive tax payers have been paying presumptive tax for the financial year 2020/21 using the old rates which were repealed and are much higher,” the petitioners contend.
They added: “The presumptive tax charged for the year 2020/21 was wrongly imposed since the assessment was made on the basis of a non-existent law contrary to Article 152 (1) of the Constitution. This is illegal.”
Through their lawyers of Atigo & Co. Advocates, the petitioners now want the Commissioner General’s Office as a quasi-judicial court, to carry forward the money in excess of taxes by SMEs to be next financial year.
They also want the tax body to issue a statement re-echoing their commitment to the tax payers’ rights charter and also invigorate a Memorandum of Understanding in consultation with Civil Society in the formulation of taxes, tax law and policy involving SMEs.