The Uganda Revenue Authority (URA) has scored a significant legal victory after the High Court overturned a decision by the Tax Appeals Tribunal in a dispute involving rice importers, safeguarding the terms of a negotiated tax settlement and reversing a decision that had increased potential interest liability by approximately UGX 13.09 billion. The judgment in Uganda Revenue Authority v David Natweta & 6 Others, High Court Civil Appeal No. 0117 of 2026, reinforces the importance of respecting agreements reached between parties to resolve financial disputes.
The case arose from consent agreements through which URA and the rice importers agreed to settle their differences over tax refund claims. Under the arrangements, the parties settled on an interest rate of 6 per cent simple interest, rather than the 2 per cent compound interest associated with certain statutory refund outcomes. The agreements formed part of a broader settlement under which the importers received more than UGX 14.54 billion in principal payments.The dispute escalated after the Tax Appeals Tribunal set aside the agreed interest arrangements and introduced a different approach to calculating interest.
This decision changed a key financial component of the original settlement and exposed URA to a substantially higher potential liability. The development prompted the authority to challenge the tribunal’s decision, arguing that the negotiated terms should remain binding rather than being replaced by a different interest formula.In its appeal, URA maintained that the consent agreements represented a deliberate compromise between the parties, with each side accepting certain concessions to bring the disputes to an end. The authority argued that the agreed interest rate was an integral part of the settlement and could not be separated from the wider arrangement. The High Court allowed the appeal and reversed the tribunal’s decision, preserving the negotiated interest terms.One of the central questions concerned the application of statutory interest provisions to negotiated settlements.
The dispute examined whether the 2 per cent compound interest rate applicable to certain statutory refund outcomes could automatically override the 6 per cent simple interest rate accepted by the parties. The position upheld in the appeal distinguished between statutory interest applicable to particular refund outcomes and interest terms agreed upon through a negotiated settlement.The financial stakes were considerable, with the tribunal’s decision reportedly increasing the potential interest liability by approximately UGX 13.09 billion. By overturning that decision, the High Court removed the additional exposure arising from the replacement of the agreed interest terms. The figure represents the estimated additional liability affected by the ruling and should not necessarily be interpreted as a confirmed cash saving of the same amount.The judgment also carries broader implications for the resolution of tax disputes in Uganda. Negotiated settlements allow parties to avoid prolonged litigation by accepting mutually agreed terms. In the URA case, the authority made concessions while the rice importers received payment of their principal claims.
The outcome highlights the importance of treating settlement agreements as complete arrangements rather than altering individual provisions without sufficient legal grounds.For URA, the decision represents an important victory in protecting public funds and defending negotiated tax agreements. It also reinforces the need for taxpayers and public institutions to understand the legal and financial consequences of settlements before accepting their terms. By reversing the tribunal’s decision, the High Court has strengthened the principle that agreements reached through negotiation should be respected, subject to the law, providing an important precedent for parties involved in similar disputes.
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