The new tax prepayment requirement is set to take effect on March 11, 2025.
In a bid to enhance tax compliance, the Uganda Revenue Authority (URA) has introduced a new policy mandating that taxpayers contesting assessments before the Tax Appeals Tribunal must first remit 30% of the assessed tax before their case can be heard.
Legal Backing
This directive aligns with Section 15(1) of the Tax Appeals Tribunal Act, aimed at streamlining tax dispute resolution and discouraging baseless appeals.
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Payment Process
To comply, taxpayers are required to generate a Payment Registration Number (PRN) via the URA web portal. When making payments, they must select the option “30% TAT Payment” under the “Basis of Payment” section.
Key Provisions
- The 30% payment will not be offset against the outstanding tax liability until the tribunal resolves the case.
- Upon resolution, taxpayers can either request a refund or apply the amount to settle any remaining tax liability as determined by the tribunal.
- If the undisputed portion of the assessed tax exceeds 30%, the taxpayer is obligated to pay that higher amount.
- The payment basis will be categorized under “Assessment” or “Audit,” depending on the nature of the tax dispute.
Impact on Taxpayers
This policy introduces a financial hurdle for businesses and individuals seeking to challenge tax assessments. By requiring an upfront payment, the URA aims to discourage frivolous appeals and expedite genuine tax dispute resolutions.
However, some critics argue that this measure could impose an undue financial burden on businesses already grappling with tax obligations.
