URA fined Shs 1.66bn over auctioning Shs 1.4bn medical equipment at Shs 4m

What the report says

The Observer reported that the High Court in Kampala has ordered the Uganda Revenue Authority to compensate Babaana Children of Uganda Ltd after finding that URA unlawfully sold donated medical equipment. Justice Bernard Namanya awarded the charity Shs 1.46 billion for the value of the goods and Shs 200 million in general damages, bringing the main compensation award to Shs 1.66 billion.

According to the report, the consignment had been donated from Switzerland and included equipment for dental surgery, rehabilitation care and gynaecology services, alongside other assorted items. Court records cited by The Observer say Babaana had obtained confirmation of a tax exemption in 2017 and later sought more time to keep the goods in a bonded warehouse because the intended health facility was not yet complete. When the organisation later moved to clear the items, it was told they had already been auctioned.

URA argued that it acted under customs law, saying the statutory warehousing period had expired and that some non-medical items in the shipment were not tax-exempt. The court rejected key parts of that defence, finding that URA did not prove it had issued the required one-month notice before sale under the East African Community Customs Management Act. The judge also questioned why goods valued at about Shs 1.46 billion were sold for only Shs 4 million and found that URA had not properly accounted for the high-value medical equipment.

The order also includes six per cent annual interest on the Shs 1.46 billion from 2018 until payment, interest on the general damages from the judgment date, and costs of the case. The decision matters because it underscores the legal duties customs authorities must follow when disposing of warehoused goods, especially donated items intended for public-interest health services.