Court Dismisses Manufacturers’ Case against use of Digital Tax Stamps

The High Court has dismissed a case by manufacturers seeking to block the launch of the digital tracking solution system.

The alcohol manufacturers, under their umbrella body, the Alcohol Association of Uganda, and 39 other manufacturers had dragged the Attorney General and URA to court, claiming that the use of the digital stamps was costly.

But in a ruling issued on Tuesday, Justice Musa Ssekaana said is the duty of every citizen to comply with the law.

“The public bodies should not be prevented from exercising the powers conferred under the statute unless the person seeking an injunction can establish a prima facie case that the public authority is acting unlawfully. The public body is deemed to have taken the decision or adopted a measure in exercise of powers which it is meant to use for the public,” he ruled.

The manufacturers had asked court to issue a temporary injunction restraining URA from punishing those who fail to comply with the requirements for implementation of the digital tax system.

The businesses say the digital tax stamps will increase the costs of production.

But URA says the new stamps solution is part of URA’s scheme to combat illicit trade, seal revenue leakages and boost collection and increased efficiency in managing taxpayer compliance.

Justice Ssekaana warned that court should be slow in granting injunctions against government projects, which are meant serve the public interests.

“The courts should be reluctant to restrain the public body from doing what the law allows it to do. In such circumstances the grant of an injunction may perpetrate breach of the law which they are mandated to uphold,” the judge ruled.

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