David Valencia MD Nile Breweries

The Tax Appeals Tribunal (TAT) slapped a fine of Shs 20 million on leading beer manufacturer Nile Breweries Limited (NBL) for contempt in a court ruling.

This is after NBL’s earlier application to TAT objecting to Uganda Revenue Authority (URA)’s additional assessment of Local Excise Duty of about Shs 8 billion and Value Added Tax of Ugx about Shs 6 billion. Subsequently, on March 17, 2022, the tribunal granted a temporary injunction order restraining URA from collecting the said taxes from NBL. 

As a condition for the injunction, TAT directed NBL to pay 30 percent of the tax in dispute translating to Shs about 4.2 billion, which the company refused to pay.

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URA proceeded to file for contempt in TAT. In response, NBL filed an application seeking interpretation of the law relating to the 30 percent tax deposit.

This interpretation application was however dismissed with costs, on objection by URA.

In their defense, NBL denied that they were in contempt of the TAT Order. The tribunal however disagreed and after evaluating the evidence presented, ruled that NBL in contempt of the TAT Orders. Consequently, TAT fined NBL Shs 20 million. NBL must still pay 30 percent of the assessed tax.

URA was represented by George Okello, Assistant Commissioner Litigation and Counsel Tonny Kalungi.

Okello noted that the ruling is very important for it reasserts the principle of respect for court orders and the Rule of law.