The Uganda Tax Appeals Tribunal has delivered an important decision on VAT refunds that settles a critical operational friction point between taxpayers and the Uganda Revenue Authority (URA).
The decision concerns key VAT principles and questions that have not been substantially litigated before in Uganda: whether a VAT refund application for VAT paid in error, on supplies which were supposed to be exempt, is valid; and whether a taxpayer who was unregistered for VAT purposes and not a VAT taxable person during the period in issue can make such a VAT refund application.
Case Citation: Portman Square Limited v Uganda Revenue Authority, TAT Application No. 179 of 2025.
The dispute centered on a Shs. 4,064,860,158 VAT refund claim arising from tax mistakenly charged by suppliers on VAT exempt hotel construction services and materials towards the Four Points by Sheraton hotel project situated in Kololo, Kampala.
This decision provides definitive clarity on the legal remedies available when VAT is paid in error on exempt supplies. Crucially, it establishes that a taxpayer’s registration status does not extinguish their statutory right to recover unlawfully collected tax, and it reprimands the tax authority’s tendency to shift administrative reconciliation burdens onto commercial entities.