The High Court has ruled in favour of the Uganda Revenue Authority (URA) in a dispute involving rice importers, overturning a tribunal decision that threatened to increase interest liabilities by billions of shillings.
In Uganda Revenue Authority versus David Natweta and 6 Others, High Court Civil Appeal No. 0117 of 2026, the court restored agreements under which URA and the importers had settled on 6% simple interest instead of 2% compounded interest.
The agreements followed the importers’ payment of more than Shs14.54 billion in principal, with URA agreeing to abandon certain contested legal defences as part of the settlement.
However, the Tax Appeals Tribunal later set aside the agreed interest terms and substituted a different calculation, potentially increasing the interest liability by about Shs13.09 billion.
The High Court ruled that the 2% compound interest rate applicable to adjudicated tax refund outcomes did not automatically apply to negotiated settlements.
The court also faulted the tribunal’s approach, which allowed the importers to retain the benefits of the agreements while rejecting the interest terms they had accepted.
URA’s successful appeal has been reported as saving approximately Shs13.9 billion, protecting the negotiated settlement from being rewritten.
