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Kaveera Makers Secure Injunction on 120 Percent Tax

MANUFACTURERS have secured a court injunction stopping the Uganda Investment Authority (URA) from charging the 120% excise duty on polythene bags above the recommended 30 microns.

The manufacturers, through James Kyazze of Shonubi Musoke & Company Advocates, requested Justice Geoffrey Kiryabwire of the Commercial Court to allow them pay a 10% duty as they await the court’s decision on the matter.

The wrangle follows the Excise Tariff Act Amendment of 2008 that imposed the 120% excise duty on polythene bags above 30 microns.

The manufacturers went to court following threats by URA to sell off their factories to recover about sh7b in tax arrears since the 120% levy was imposed.

“My clients have agreed to pay 10% and this must be deducted from sacks and bags only but not from all the other products they manufacture as stated in the 2008 Excise Tariff Amendment Act,” Kyazze told the court last week.

Kiryabwire said URA should accept the 10% duty as court resolves the remaining issue of the levy covering all products.

The Judge also criticised institutions for failing to negotiate with their clients and always running to courts.

“Commercial banks, for example, have made courts their credit managers. Instead of calling their clients to ask what could have made them delay to repay the loan, they run to courts,” he explained.

“Some of those cases don’t need to be brought to court. You can easily solve them through negotiations. These are your tax-payers who have been here for a long time and are not running away. It is better to negotiate with them instead of selling off their properties,” Kiryabwire advised.