URA Wins Major Court Battle in Rice Tax Dispute, Saves Billions in Interest

What the report says

The Uganda Revenue Authority has won an appeal in the High Court in a tax dispute involving rice importers, after the court overturned an earlier Tax Appeals Tribunal decision. The case, cited as Uganda Revenue Authority v David Natweta & 6 Others, concerned how interest should be handled under settlement agreements reached between URA and the importers.

According to Watchdog Uganda, the parties had agreed to settle their dispute through consent arrangements that provided for 6% simple interest, rather than the 2% compound interest rate associated with some statutory refund outcomes. The tribunal later set aside those interest terms and substituted a different approach, which the outlet said would have increased the possible interest liability by about UGX 13.09 billion.

The High Court accepted URA’s argument that the settlement terms were negotiated and should not have been rewritten. It found that the statutory rate did not automatically replace the agreed terms of a settlement reached by both sides. The dispute also involved principal payments of more than UGX 14.54 billion to the importers, which had formed part of the wider bargain.

The ruling is significant because it reinforces the idea that completed settlement agreements should generally be treated as a whole. In practical terms, the decision protects URA from the additional interest exposure created by the tribunal’s earlier ruling and may influence how future tax disputes are settled and enforced.