Overview:
In a judgment with significant implications for the business community, the Tribunal found that URA improperly rejected the declared customs value of Depo Limited, a building materials importer, during the importation of stone-coated steel roofing tiles from China.
KAMPALA – The Tax Appeals Tribunal has set aside a Shs31.8 million customs tax assessment issued by the Uganda Revenue Authority (URA), ruling that the authority acted unlawfully by discarding an importer’s declared transaction value and substituting it with a reference price drawn from its internal database.
In a February 13, 2026, judgment with significant implications for the business community, the Tribunal found that URA improperly rejected the declared customs value of Depo Limited, a building materials importer, during the importation of stone-coated steel roofing tiles from China.
The dispute arose after URA’s Customs Enforcement department questioned the timing of payments made by Depo Limited to its supplier. The authority cited what it termed “glaring inconsistencies,” noting that some payments appeared to have been made months before corresponding invoices were issued.
However, the Tribunal—chaired by Crystal Kabajwara alongside Rosemary Najjemba and Proscovia Rebecca Nambi—held that the importer had sufficiently explained the payments as advance remittances made under a valid supply agreement. The panel found that the documentation presented, including telegraphic transfer records and contractual agreements, supported the declared transaction value.
In a pointed observation, the Tribunal stated that verification is meant to test evidence rather than displace a transaction value based on unresolved suspicion. It emphasised that once an importer provides credible proof of the price actually paid or payable, the Commissioner does not have unfettered discretion to ignore that evidence and move to alternative valuation methods.
After rejecting the declared value, URA applied a rate of USD 1.75 per kilogram derived from its internal customs database, resulting in a top-up assessment of Shs31,804,124. The Tribunal found this approach inconsistent with the valuation hierarchy established under the East African Community Customs Management Act (EACCMA).
Under the law, customs authorities are required to apply six sequential valuation methods and may only resort to the “fallback” method after demonstrating that the preceding five methods are inapplicable. The Tribunal ruled that URA had prematurely invoked the fallback method without properly exhausting the legally mandated sequence.
The judges warned that treating a database figure as a stand-alone customs value risks replacing the statutory framework with administrative discretion. They stressed that the fallback method is residual and constrained by legal principles, not a mechanism for imposing arbitrary figures.
The Tribunal also faulted URA for failing to provide a written explanation detailing how the USD 1.75 per kilogram rate was determined or why it was appropriate for the specific consignment. It underscored that taxpayers are entitled to transparency and clarity in the computation of tax assessments.
In its final orders, the Tribunal nullified the Shs31,804,124 additional assessment and directed that any excess taxes paid under protest be refunded in accordance with the law. URA was also ordered to bear the legal costs incurred by Depo Limited.
Legal observers say the ruling reinforces the principle that tax administration must operate within structured statutory limits rather than broad administrative discretion. For importers, the decision provides reassurance that properly documented transaction values cannot be disregarded solely on the basis of suspicion, strengthening certainty and predictability in Uganda’s trade environment.