fbpx
  • Entertainment
  • Interviews
  • Supplements
  • Jobs & Tenders
  • Uganda Votes
  • Facebook
  • Twitter
  • LinkedIn
  • Instagram
  • Reddit
  • Feed
  • Youtube
Kampala-Dispatch-Logo.png
  • Home
  • News
  • Politics
  • Business
  • Culture & Lifestyle
  • Technology
  • Opinion
  • Sports & Health
  • Travel
Latest News
  • [ September 22, 2023 ] Former ICC employee accused of funding LRA rebel leader Kony News
  • [ September 20, 2023 ] Former UNBS Director Ebiru loses court to block bribery trial News
  • [ September 20, 2023 ] Court okays cross examination of witnesses in Kitutu torture case News
  • [ September 20, 2023 ] Acholi elite demand cancellation of fraudulent land titles News
  • [ September 19, 2023 ] Police dares Bobi Wine’s NUP party to resume countrywide tours News
HomeNewsNSSF interest to savers cannot be taxed – High Court

NSSF interest to savers cannot be taxed – High Court

November 5, 2020 News 0

National Social Security Fund- NSSF building, Kampala
National Social Security Fund- NSSF headquarters in Kampala

Kampala, Uganda | URN | The National Social Security Fund [NSSF] has won a landmark case that has saved workers savings up to 43 billion shillings.

Uganda Revenue Authority [URA] had written to NSSF seven years ago, informing the agency that the interest paid to members accounts is accepted as an allowed deduction. This meant that NSSF was supposed to pay taxes before paying interest to the members, effectively reducing the value of the members savings.

This was a change of opinion by the URA which had in 2001 allowed NSSF to deduct payable interest, as an expense. According to the judgement by the Commercial Division of the High Court, the URA conducted an audit for the period 2005 to 2012 and issued an assessment of 30.5 billion Shillings as principal tax and a penal tax interest of 12 billion Shillings to NSSF, disallowing the said interest as an allowable deduction.

But the Fund objected to the assessment on the ground that it was entitled to deduct the said interest under section 25 (1) of the Income Tax Act. It then filed a suit in the High Court of Uganda challenging the decision.

However, due to a precedent set in an earlier decision by the court in Uganda Revenue Authority versus Rabbo Enterprises Ltd and another, the matter was referred to the Tax Appeals Tribunal.

The Tribunal delivered a ruling in favour of URA to the effect that the interest payable to the NSSF members is not an allowable deduction and that the NSSF must pay the principal tax and penal tax assessed. However, in the minority ruling, one of the Tribunal members held that the Appellant was not liable to pay the penal tax assessed.

The NSSF then appealed the decision at the High Court’s Commercial Division arguing that the Tribunal erred in law when they found that the contributions made by the Applicant’s members do not create a debt on the part of the Fund and therefore interest payable to savers was not a deductible expense.

The Tribunal’s decision was also interpreted to mean that the annual interest paid by the NSSF to its members was not incurred in the production of income included in the gross income, which the NSSF also challenged.

NSSF, the Appellant, was represented by Oscar Kambona, Cephas Birungi, Bruce Musinguzi and Martin Mbanzam while Mwajuma Nakku Mubiru, Ronald Baluku Masamba, Barbra Ajambo Nahone and Aliddeki Ssali Alex represented URA.

In the ruling, Justice Boniface Wamala stated that the appeal has succeeded on all five grounds in the appeal.

“In substance, therefore, the appeal wholly succeeds. I accordingly set aside the ruling and orders of the Tax Appeals Tribunal and substitute them with the decision that… the Appellant is not liable to pay the… tax assessed,” the judge ruled. He also directed URA to pay the costs of the proceedings in both the commercial division and the Tax Appeals Tribunal.

Read Also: Case seeking mid-term access to NSSF funds delayed for another four months

The NSSF says if the court had ruled in favour of URA, it would have meant that the interest payable to savers annually, reduces drastically.

The NSSF is now entitled to the refund of the 30 per cent of the 432 or about 140 billion shillings, it had deposited in an escrow account as demanded by the law when there is a tax dispute going on.

  • High Court
  • National Social Security Fund (NSSF)
  • NSSF
  • Savings
  • Uganda Revenue Authority (URA)

Related Articles

Labour inspectors tasked to enforce amended NSSF Act
News

Labour inspectors tasked to enforce amended NSSF Act

August 11, 2023 0

Kampala, Uganda | URN | The Ministry of Gender and the NSSF are mobilizing Labour …..READ MORE

I saw Mathew Kanyamunyu give a pistol to Joseph, security guard pins brothers
News

I saw Mathew Kanyamunyu give a pistol to Joseph, security guard pins brothers

January 9, 2020 1

Kampala, Uganda | URN | A former security guard at Nakasero Hospital, has told court …..READ MORE

Ugandan manufacturers operating at night to evade digital tracking system
Business

Ugandan manufacturers operating at night to evade digital tracking system

March 10, 2021 0

Kampala, Uganda | URN | Several manufacturers in Uganda have resorted to distributing their products at …..READ MORE

Follow Us On:

  • Facebook
  • Twitter
  • LinkedIn
  • Instagram
  • Reddit
  • Feed
  • Youtube

Follow Our Facebook Page

News in Pictures

  • Air Tanzania launches flights to Uganda
  • Partners or Competitors? The road to East African integration
  • Cross-border tensions as Rwanda deports five Ugandans
  • Why Uganda has suspended CCEDU, Chapter Four and 52 other NGOs
  • Sylvia-Namubiru
  • Magnitude of antimicrobial resistance in Uganda unknown - Experts
  • Confusion surrounds administration of J&J COVID-19 vaccines in Uganda
  • Sembabule woman beheads husband over Shs 20,000
  • Ugandan gov't set to recruit more 2,500 teachers

Trending Now

  • Rebel leader Joseph Kony
    Former ICC employee accused of funding LRA rebel leader Kony
  • HIV/AIDS infections high among older men - Health Experts
    Uganda police hunt woman implicated in the sale of young girls as sex slaves
  • Woman accused of defrauding 200 girls of Shs 90m in job promises
    Uganda’s CID probes death of newly wedded bride seeking contraception
  • FULL SPEECH: President Museveni's inaugural speech for sixth term
    FULL SPEECH: President Museveni’s inaugural speech for sixth term
  • Teargas engulfs Kampala as boda riders protest colleague's death
    Teargas engulfs Kampala as boda riders protest colleague’s death

Sponsored

Advertise-With-Us

Featured Video

Latest News
  • Rebel leader Joseph Kony

    Former ICC employee accused of funding LRA rebel leader Kony

    September 22, 2023 0
  • Former UNBS Director Ebiru loses court to block bribery trial

    Former UNBS Director Ebiru loses court to block bribery trial

    September 20, 2023 0
  • No more taking photographs, videos from Karamoja iron sheets trial

    Court okays cross examination of witnesses in Kitutu torture case

    September 20, 2023 0
  • Acholi elite demand cancellation of fraudulent land titles

    Acholi elite demand cancellation of fraudulent land titles

    September 20, 2023 0
Follow Us on Twitter
Tweets by @dispatchug
Kampala Dispatch Magazine

 

 

PUBLISHERS
The Kampala Dispatch
P.O. Box 27258 Kampala, Uganda
Tel: +256 393 299066 / +256 772 622850
Email: info@dispatch.ug

  • About Us
  • Contact Us
  • Advertise With Us
  • Privacy Policy
  • Terms of Use

Copyright © 2023 Kampala Dispatch. All Rights Reserved.