URA’s 30% Tax Appeal Payment Rule Raises Concerns
Businesses continue to raise concerns over the strict enforcement of mandatory prepayments before tax disputes can be heard by the Tax Appeals Tribunal.
The Uganda Revenue Authority (URA) has intensified enforcement of the 30% prepayment requirement applicable to disputed tax assessments before matters can be heard by the Tax Appeals Tribunal (TAT), creating significant concern within Uganda’s private sector.
Under the current framework, taxpayers are required to pay either 30% of the assessed tax or the undisputed portion of the tax assessment, whichever is higher, before an appeal can proceed before the Tribunal.
New Payment Enforcement Mechanism
As part of the stricter enforcement measures introduced during the 2025/2026 period, taxpayers are now required to generate a dedicated Payment Registration Number (PRN) through the URA web portal by selecting “30% TAT Payment” under the basis of payment category.
The prepayments are maintained in segregated accounts and are not immediately applied toward outstanding tax liabilities until the Tribunal formally resolves the dispute.
Where taxpayers succeed in their appeals, the amounts paid may either be refunded or offset against other outstanding tax liabilities.
Increasing Concerns from the Private Sector
Business associations including the Private Sector Foundation Uganda (PSFU), Uganda Manufacturers Association (UMA), and Kampala City Traders Association (KACITA) have raised concerns regarding the financial burden created by the requirement.
According to the private sector, the mandatory upfront payment has contributed to significant cash flow constraints and liquidity challenges, particularly for businesses facing large or disputed tax assessments.
Several stakeholders have argued that the requirement creates a barrier to justice by limiting the ability of taxpayers to challenge assessments they consider excessive or unlawful.
Dismissal of Tax Appeals
Reports indicate that certain tax disputes have been dismissed on procedural grounds where taxpayers failed to satisfy the 30% prepayment condition before the Tribunal.
In response, private sector leaders have continued to petition government authorities for reforms to the Tax Appeals Tribunal framework, including proposals to allow alternatives such as bank guarantees or reduced deposit requirements.
Recent Legal Developments
In a recent ruling involving MTN Uganda, the Tax Appeals Tribunal directed URA to halt the collection of more than Shs169.9 billion, citing procedural concerns relating to the issuance of the original tax assessment.
The Tribunal has also, in certain instances, acknowledged the principle of “substantial compliance” by allowing taxpayers to offset the 30% requirement using existing tax credits such as VAT refund balances.
Despite these developments, Uganda’s Supreme Court has previously upheld the legality of the 30% payment requirement under the existing legal framework.
Business Implications
The stricter enforcement environment highlights the growing importance of proactive tax compliance, dispute management, documentation, and early engagement with tax authorities.
Organizations should review their tax risk management frameworks, assessment review procedures, cash flow planning, and dispute resolution strategies to ensure preparedness for evolving enforcement practices within Uganda’s tax administration environment.
“Effective tax dispute resolution frameworks must balance revenue collection objectives with fairness, transparency, and business sustainability.”