• Sun. Jun 26th, 2022

Lawyer Petitions High Court Seeking To Squash URA’s Directive Requiring Buyers and Sellers of Land to Have a TIN

UGANDA, Kampala Real Muloodi News | On December 3rd, Uganda Revenue Authority (URA) announced a directive requiring buyers and sellers of land worth 10 Million Shillings or more to have a tax identification number (TIN). The directive became effective December 6th. According to URA, the requirement is aimed at registering all the potential taxpayers and widening the current tax base.

Lawyer Male Mabirizi has since petitioned the Civil Division of the High Court in Kampala seeking to quash the directive.

Mabirizi is challenging the directive on grounds that URA has no powers to compel a person who is not liable to pay tax to register for a TIN. He argues that under the law, the registration for TIN is voluntary, and that stamp duty is a non-tax revenue and therefore it doesn’t require a TIN.

According to Mabirizi, the URA decision is contrary to the Tax Procedure Code Act, and it puts illegal barriers to the transfer of property. Mabirizi says this undermines Ugandan’s right to own property which is provided for in the Constitution.

Mabirizi therefore asserts that the directive is illegal, improper, and exceeds the powers and functions of URA.

In addition to seeking orders to quash the directive, Mabirizi also wants the court to issue a permanent order restraining URA from implementing it. He is also seeing general, exemplary and aggravated damages for inconveniences caused to him as a result of the directive.

Perhaps coincidently, today URA issued a public notice that they have simplified the process for applying for a TIN, and that effective January 1st, 2022, a TIN is now issued instantly. Applicants are no longer required to submit manual documents to the URA, and can instead provide basic documents, to include either a National Identification Number, passport or driving permit.  The URA claims that this change is being effected to enhance service delivery.

The Ministry of Finance has set an ambitious collections target for the URA for the coming financial year. The Authority will have to have to bring in revenues amounting to USh25.5Tn in FY2022/23, an increment of USh3Tn.

Of this, USh 23.755Tn is projected to be raised from tax revenue, with USh1.761Tn from Non Tax revenue sources.

According to the Auditor General’s Report in December 2020, Public Debt stands at USh65 trillion, while the tax to GDP ratio stagnated at 13%. Since the report, URA has registered revenue shortfalls month over month, compounding Uganda’s debt situation. This increases the urgency and pressure on URA to meet the ambitious collections targets set for the coming fiscal year.

URA is yet to be summoned to defend itself over the allegations, before the matter can be allocated to a Judge who will then fix it for hearing.

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