Page 12 - DMEA Week 14 2020
P. 12
DMEA FUEL DMEA
Libya Oil Uganda wins early victory in lawsuit over tax payments
UGANDA
A subsidiary of Kenya’s Ola Energy has sued Uganda over demands for payment of import taxes.
OLA Energy, a fuel marketing company for- merly known as OiLibya (itself a subsidiary of Tamoil Africa Holdings), has taken legal action against the Ugandan Revenue Authority (URA) to protest against the latter’s demand for pay- ment of import taxes.
Last week, the company’s Ugandan subsid- iary, Libya Oil Uganda Ltd (LOUL), filed suit against URA at the sub-registry of the East Africa Court of Justice (EACJ) in Nairobi. In its peti- tion, LOUL said it was seeking to bar the Ugan- dan Attorney General’s office and URA, which is acting as the office’s agent, from collecting the taxes before the matter could be adjudicated by the regional court’s First Instance Division.
The Ola Energy subsidiary justified its request for relief by saying that if the URA was allowed to proceed, LOUL would be rendered unable to continue operating, especially since the company is already suffering from the impact of the coro- navirus (COVID-19) pandemic. It also alleged that the Ugandan agency’s demands for payment had violated the terms of the East Africa Com- munity (EAC) treaty, customs union and com- mon market protocols.
Additionally, it described URA’s demand for
payment of nearly $650,000 worth of import taxes as discriminatory. “The Attorney General of Uganda, through its agent URA, issued the applicant with a decision dated January 31, where it made a finding that certain lubricant products imported by the applicant from its parent com- pany’s (Ola Energy Kenya) manufacturing plant in Kenya did not qualify for preferential treat- ment as originating from Kenya, thus imposing a tax liability of UGX2.48bn ($647,558),” it said.
The EACJ ruled in LOUL’s favour, according to The East African newspaper. It stated that the URA could not collect any of the money it had demanded until the First Instance Division had the chance to begin hearings at a later date.
“Pending the hearing and determination of this application, a temporary injunction is issued restraining the URA from taking any enforce- ment action, including the issuance of agency notices to enforce the impugned decision dated January 31 and the subsequent demand issued onFebruary24,”thecourtsaid.
As of press time, none of the parties involved had said when EACJ might move on to the next stage of the legal process. LOUL and URA have been at odds on this front for about five years.
P12
w w w . N E W S B A S E . c o m Week 14 09•April•2020
