The Tax Appeals Tribunal ("TAT") has delivered an important ruling clarifying the manner in which the statutory 30% tax deposit is to be paid by a taxpayer pursuing a tax dispute before the Tribunal.

In Strategic Initiative for Women in the Horn of Africa (SIHA) v Uganda Revenue Authority, the Tribunal held that although section 15 of the Tax Appeals Tribunal Act requires payment of 30% of the tax assessed or the undisputed portion, whichever is greater, the provision does not require that the 30% be paid as a lump sum. The Tribunal further held that, in appropriate circumstances, the balance may be paid in instalments.

The ruling was delivered on 14th August 2026 and provides useful guidance to taxpayers facing significant tax liabilities while pursuing objections or appeals.

1. Brief Facts

SIHA is a not-for-profit organisation operating in several countries in the Horn of Africa, including Uganda. On 6th and 10th March 2025, URA issued additional PAYE assessments against SIHA amounting to approximately UGX 706.9 million. SIHA subsequently filed an application before the Tribunal challenging the assessments, principally on the basis that its consultants and suppliers had been wrongly reclassified as employees.

Under section 15 of the Tax Appeals Tribunal Act, SIHA was required to pay 30% of the tax assessed, amounting to approximately UGX 212.06 million, pending resolution of the tax dispute. SIHA, however, contended that it was unable to raise the entire 30% amount at once because their operations and cash flow had been affected by the war in Sudan, which resulted in the redirection of funding previously provided to it. It therefore applied to URA on 15th December 2025 for permission to pay the 30% deposit in five equal instalments.

Importantly, SIHA had already demonstrated its willingness and ability to comply by making two instalment payments.

SIHA stated that despite engaging URA on several occasions regarding its request, it received no response for over two months. On 6th February 2026, URA rejected the request, taking the position that section 15 required the 30% deposit to be paid as a lump sum and that URA had no discretion to permit payment by instalments. SIHA consequently approached the Tribunal seeking permission to pay the outstanding portion of the 30% deposit by instalments.

2. Issues for Determination

The principal issue for determination before the Tribunal was whether SIHA should be granted permission to pay the 30% tax deposit in instalments. A significant part of the dispute concerned whether the Tribunal had jurisdiction to review URA's decision refusing the proposed instalment arrangement.

3. SIHA's Position

SIHA argued that the Tribunal had jurisdiction to review URA's decision. It relied, among others, on sections 14 and 20 of the Tax Appeals Tribunal Act, which empower the Tribunal to review taxation decisions and exercise the powers and discretions conferred on the relevant taxing legislation.

SIHA argued that:

SIHA also relied on the Tribunal's earlier decision in Century Bottling Company Limited v URA, Miscellaneous Application No. 32 of 2020, where the Tribunal had permitted payment of the 30% deposit in instalments.

4. URA's Position

URA opposed the application and argued that the Tribunal lacked jurisdiction to grant the orders sought. URA's position was essentially that:

URA also relied on authorities including Uganda Projects Implementation Management Centre (UPIMAC) v URA and the principle that tax legislation should be interpreted according to what Parliament has expressly enacted.

5. The Tribunal's Decision

a. The Tribunal has jurisdiction to review the Commissioner's decision

The Tribunal rejected URA's argument that it lacked jurisdiction. Relying on sections 14 and 20 of the Tax Appeals Tribunal Act, the Tribunal held that a decision by the Commissioner General refusing a taxpayer's request to pay the 30% deposit in instalments constitutes a taxation decision capable of review by the Tribunal.

The Tribunal referred to its earlier decision in MTN Uganda Ltd v URA, TAT Application No. 15 of 2018, where it held that the Tribunal has jurisdiction to review the exercise of discretion by the Commissioner General. Accordingly, a taxpayer aggrieved by the Commissioner's exercise of discretion is entitled to seek review before the Tribunal.

b. The 30% deposit does not have to be paid as a lump sum

This was arguably the most significant finding in the ruling. The Tribunal considered section 15(1) of the Tax Appeals Tribunal Act, which provides that a taxpayer who has lodged a notice of objection shall, pending final resolution of the objection, pay 30% of the tax assessed or the part of the tax assessed not in dispute, whichever is greater. The Tribunal held that the phrase "pending final resolution of the objection" refers to the period before the Tribunal finally determines the substantive tax dispute.

Importantly, the provision does not prescribe the mode of payment. The Tribunal therefore rejected URA's argument that section 15 necessarily requires the taxpayer to pay the entire 30% in one lump sum. The Tribunal stated, in substance, that the absence of an express prohibition against instalments cannot be interpreted as an implicit requirement for lump-sum payment. The Tribunal emphasised that courts and tribunals cannot introduce into legislation conditions which Parliament did not expressly enact.

c. URA incorrectly stated that it had no discretion to permit instalment payments

The Tribunal went further and considered section 31(3)(b) of the Tax Procedures Code Act, which gives the Commissioner General discretion, having regard to the circumstances of a case, to require a taxpayer to pay tax in instalments as the Commissioner may determine. The Tribunal found that this provision confers clear discretionary authority on the Commissioner General to permit instalment payments. Consequently, URA's statement in its rejection letter that "the law does not provide for payment of tax in instalments" was found to be a misstatement of the law. The Tribunal concluded that URA had failed to properly direct itself on the applicable law and had therefore failed to exercise its discretion judiciously.

6. The Commissioner's Discretion Is Not Absolute

The Tribunal also reaffirmed an important administrative law principle that a statutory discretion must be exercised reasonably, lawfully and on the basis of relevant considerations. The Tribunal considered the earlier decision in Century Bottling Company Limited v URA, where the Commissioner General's refusal to allow payment of a substantial tax liability in instalments was found to be unreasonable in light of the economic circumstances then prevailing after the Covid-19 lockdown.

In SIHA's case, the Tribunal took into account the impact of the war in Sudan, the reduction and reallocation of funding available to the Applicant, SIHA's resulting financial constraints, the substantial amount involved, SIHA's prior payment of two instalments towards the 30% deposit and SIHA's demonstrated willingness to comply with its statutory obligation.

The Tribunal found that URA's refusal was unreasonable and punitive, particularly because SIHA had already paid approximately UGX 92.78 million towards the required deposit. The Tribunal allowed SIHA's application and permitted SIHA to pay the remaining balance of the 30% tax deposit within two months from the date of the ruling.

7. Key Takeaways for Taxpayers

Conclusion

The SIHA v URA decision provides welcome clarification for taxpayers facing substantial assessments while pursuing tax disputes. The central message is that the statutory obligation to pay 30% does not automatically translate into an obligation to pay the entire amount in one lump sum. At the same time, the ruling should not be understood as giving every taxpayer an automatic entitlement to pay the 30% deposit by instalments. The circumstances of each case remain relevant. For taxpayers facing significant disputed assessments, the decision provides an important avenue for managing cash-flow pressures while maintaining their right to pursue a tax dispute before the Tribunal.

Should you have any questions or require additional advice in regard to this alert or any similar guidance, do not hesitate to contact our Tax Advisory Team at wilfred.o@onyangoadvocates.com.