High Court Orders Airtel Uganda to Pay URA Shs 1.1 Billion in Tax Dispute

The High Court in Uganda has directed telecom operator Airtel Uganda to settle a Shs 1.1 billion tax bill with the Uganda Revenue Authority (URA). The ruling stems from a disagreement over the declared value of imported Broadband Processing Board (BPB) equipment used for high-speed data management and traffic switching.

Airtel reported the value of a BPB Model N2 unit from Zhongxing Telecommunications Equipment Corporation at $1,350 (roughly Shs 5 million). In contrast, another telecom firm declared the same equipment at $10,200 (about Shs 38 million) per unit around the same time, sparking URA’s suspicions.

URA conducted a warehouse audit, confirmed the equipment’s similarity, and switched to valuing it based on identical goods transactions. This led to the Shs 1.1 billion reassessment, which Airtel contested at the Tax Appeals Tribunal.

The tribunal initially instructed URA to revisit the valuation using Airtel’s purchase receipt. However, Justice Stephen Mubiru set aside this decision, criticizing the tribunal for accepting new evidence not provided during URA’s initial probe.

The judge affirmed URA’s right to use alternative methods when importers fail to supply documentation, dismissing Airtel’s unproven claim of a discounted framework agreement with the supplier. He stressed that tax authorities must prevent unfair advantages through proper valuation.

Airtel must now pay the assessed amount, as the court’s decision validates URA’s approach despite any procedural issues in prior stages.

Source: The Observer (Uganda)