TOFI wants the court to issue an order prohibiting the government and the Uganda Revenue Authority from enforcing the 2020 Income Tax (Rental Rate) regulations.
The Open Forum Initiative-TOFI called on the Civil Division of the High Court to overturn the rent (income) tax regulations issued by Finance Minister Matia Kasaijja in January this year. The Uganda Revenue Authority-URA and the Attorney General are the respondents to the prosecution.
The nonprofit policy and tax advocacy cabinet said regulations published in the National Gazette on March 13, 2020 increased the tax for individuals and businesses with rental properties along roads, tracks or streets from 20 to 30% as of July 1, 2020..
The regulations also require people who earn rental income from more than one building to account for building expenses and pay tax for each building separately. However, TOFI says the regulations did not gain the necessary parliamentary approval, as required by the Income Tax Act.
Emmanuel Ajal, executive director of TOFI, said the failure to follow the planned procedures deprived the taxpayers concerned of the opportunity to participate in the drafting of the new regulations.
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In his affidavit, Ajal argues that the Rent (Income) Tax Regulations of 2020 are illegal and should not be tolerated by the court or any other law-abiding citizen.
Through its attorneys at Festo and Company Advocates, TOFI says the claim is a matter of public importance, which will affect countless people if the court does not overturn the contested settlements.
TOFI wants the court to issue an order prohibiting the government and the Ugandan Revenue Authority from enforcing the 2020 Income Tax (Rental Rate) regulations.
The court has yet to summon the Attorney General and the Ugandan tax authority to file their defense in the case before it is assigned to a judge for hearing.