High Court dismisses Nile Breweries bid to block 18.5 billion shilling tax claim

KAMPALA, Uganda — The High Court Commercial Division has thrown out a bid by Nile Breweries Limited to halt the collection of a multi-billion shilling tax debt, clarifying that the legal battle over the matter is already settled.

Acting Judge Susan Odongo dismissed the brewer’s application on May 25, 2026, noting that the company cannot relitigate a dispute that has already been decided. In her ruling, Odongo explained that the application fell squarely under the doctrine of res judicata, a legal principle that bars parties from reopening cases that have already been adjudicated. She ordered Nile Breweries to cover the legal costs incurred by the Uganda Revenue Authority.

The decision represents a major win for the tax body as it ramps up efforts to collect one of its largest recent tax assessments against a multinational manufacturer in the country.

The multi-year standoff began after the revenue authority audited Nile Breweries’ regional transactions. The company had listed beer exports to South Sudan and the Democratic Republic of Congo through local agents, including Ituri Investments Limited and Kabaco Uganda Limited, as zero-rated transactions. However, tax investigators determined that these shipments were actually standard local sales, making them liable for value-added tax and local excise duty. The final assessment totaled 18.5 billion Ugandan shillings for transactions conducted between January and November 2022.

Nile Breweries filed a formal objection to the bill in March 2024, but the revenue authority rejected the protest in consecutive decisions issued in April and June of that year. The beverage company then took the matter to the Tax Appeals Tribunal. While the tribunal dismissed several older assessments because they fell outside the lawful time limit, it validated the tax body’s assessment regarding the core VAT and excise duty liability.

The brewer subsequently appealed the tribunal’s decision to the High Court and sought an emergency order to freeze enforcement actions while the appeal is heard.

In its latest push for an injunction, Nile Breweries argued that a sudden enforcement action by the government would cripple its daily commercial operations and jeopardize the entire appeals process.

Faith Mirembe, the legal and compliance manager for Nile Breweries, stated in court documents that the tax body was preparing to issue agency notices directly to the company’s commercial banks to freeze and seize the funds. Mirembe warned that such aggressive recovery tactics would render their ongoing appeal useless and force the business into an impossible financial position.

According to company filings, the tax body had already recovered over 17 billion shillings in February 2026, which the brewer claimed forced it to scale back factory production and freeze capital investments. Nile Breweries also noted that sudden cash seizures would trigger loan defaults, damage its standing with creditors, and make it difficult to buy raw materials. Additionally, the company argued that retrieving money from the government’s Consolidated Fund is notoriously slow, meaning it would face severe cash flow constraints even if it eventually wins the main appeal.

The revenue authority asked the court to reject the application, framing it as a repetitive stall tactic designed to frustrate lawful revenue collection.

Stuart Aheebwa, a legal manager for the revenue authority, argued that Nile Breweries was abusing the judicial system by filing identical requests. Aheebwa noted that a separate High Court judge, Susan Abinyo, had already dismissed a matching application filed by the brewer.

The revenue authority maintained that its primary public mandate is to collect state revenue and that operations should not be paralyzed by a continuous stream of identical injunction requests. Tax officials also dismissed claims of permanent financial damage, stating that the dispute involves liquid currency that can easily be refunded if the final appeal succeeds. Furthermore, the tax body argued that Nile Breweries had failed to provide adequate financial security to the court during the appellate process.

Odongo sided with the revenue authority, finding that the core issues in the new application had already been evaluated and decided in the previous round of litigation before Abinyo.

The judge pointed out that during the earlier case, Nile Breweries had explicitly asked for a temporary injunction alongside a stay of execution but ultimately chose to abandon the injunction request during the hearings. Odongo noted that under Section 7 of the Civil Procedure Act, any legal remedy requested by a applicant but not explicitly granted by the bench is legally deemed to have been denied.

Odongo ruled that Nile Breweries could not bypass this rule simply by repackaging an old request under a different name when the underlying facts and intended targets remain identical.

The judge closed with a warning against allowing corporate taxpayers to file endless strings of applications to delay enforcement. She stated that allowing companies to jump from one injunction request to another would paralyze the tax authority’s public functions and undermine the legal necessity of finality in court judgments.