KAMPALA – The Tax Appeals Tribunal dismissed TAT application No. 72 of 2018 with costs awarded to URA, on grounds that the information provided by the applicant, Joseph Okuja cannot be relied upon to recover VAT refunds, hence it did not entitle him to any reward as an informer.
The Applicant had instituted the Application in the Tax Appeals Tribunal against URA, challenging URA’s refusal to pay him a reward as an informer under the Finance Act and the Tax Procedure Code Act, 2014.
Joseph Okuja made an informer’s disclosure to the effect that URA had wrongly issued VAT refunds to traders /exporters who were exporting agricultural products and he specified a list of companies who had been recipients of the said refunds.
In the disclosure, The Applicant contended that the agricultural products that were being exported by the said companies, were exempt products and could therefore not attract a VAT Refund.
Upon receipt of this information, URA’s Tax Investigations Department, Science Unit, commenced investigations into the matter, and subsequently concluded that the said information does not give rise to any recoverable funds and that the refunds issued to the said companies were rightfully derived and payable. This was based on URA’s interpretation, to the effect that the supplies are zero rated but not exempt. Since there was no tax collectable or recoverable under disclosure, the reward as claimed by the Applicant does not arise.
The Tax Appeals Tribunal in its Ruling held that if a supply is not exempt, it is a taxable supply and that taxable supplies may either be standard rated or zero rated. The implication of paragraph 1(a) of the Third Schedule to the VAT Act is that exports of goods by a registered taxpayer, where there is evidence to show that they are delivered outside Uganda, attract a VAT rate of zero percent. The Tribunal noted that the Third Schedule to the VAT Act deals specifically with exports and that where a provision of a statute is clear and specific, it should be given its plain meaning without setting new conditions for its application.
Accordingly, the Tribunal dismissed the Application with costs awarded to URA.
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Uganda Revenue Authority