The Uganda Revenue Authority (URA) on 11 March 2025, published a notice stating that, effective immediately, a new method must be used to pay the 30% of tax assessed in any matter before the Tax Appeals Tribunal (TAT) prior the TAT's hearing the case. Under this new method, the prepayment only applies to the matter before the TAT.

Previous system

The previous system, enacted under the Tax Appeals Tribunal Act, 1997, required that 30% of the tax assessed be paid before appeals could be heard, but did not provide a specific method for making payment. The prior system involved the following steps:

1. Payment Registration Number (PRN): Taxpayers would generate a PRN on the URA Web Portal, but there was no specific option for the 30% TAT payment (the PRN was used for general tax payments).
2. Payment application: The payment was immediately applied against the taxpayer's outstanding tax liability, regardless of the ongoing dispute before the Tribunal.
3. Refunds and offsets: There was no clear provision for applying for a refund or using the payment to offset other outstanding tax liabilities after the case was resolved.

New system

The new system introduces a specific option for the 30% TAT payment, ensuring that the payment is held separately until the matter is resolved. The new system is aimed at operationalizing Section 15(1) of the Tax Appeals Tribunal Act, which mandates the payment of 30% of the tax assessed or the part of the tax not in dispute, whichever is greater, before the matter is heard by the TAT. The new system for paying the 30% tax assessed in matters before the TAT involves the following steps:

1. New payment option: Taxpayers required to pay 30% of the tax assessed can now generate a PRN by selecting "30% TAT payment" under the "Basis of Payment" on the URA Web Portal.
2. Payment application: The payment made under this option will not be applied against any outstanding tax liability until the TAT resolves the matter.
3. Post-resolution options: Upon resolution, taxpayers can either apply for a refund of the 30% tax paid or use the payment to offset any other outstanding tax liability, depending on the case outcome.
4. Greater tax not in dispute: If the tax not in dispute exceeds 30% of the assessed tax, the payment basis will be either "Assessment" or "Audit," as applicable.

Implications

The specific PRN serves to ring-fence payments related to disputes before the TAT, ensuring that these payments are not offset against any outstanding amounts on the tax ledger.