Nile Breweries loses bid to block URA from collecting US$4.9M tax demand

UGANDA – The Commercial Division of the High Court in Uganda has dismissed with costs an application by Nile Breweries Uganda Limited seeking to stop the Uganda Revenue Authority (URA) from collecting 18.5 billion (US$4.2M) Shillings in disputed taxes. 

The dispute arose from a 2023 tax reassessment conducted by URA, which determined that Nile Breweries owed 18.509 billion Shillings in Value Added Tax (VAT) and Local Excise Duty covering the period between January and November 2022. 

Nile Breweries, a major alcoholic beverage manufacturer exporting products to South Sudan and the Democratic Republic of Congo, argued that the goods in question were intended for export and therefore qualified for exemption under Uganda’s zero-rated export tax regime. 

However, URA concluded that the products had not been manufactured specifically for export and were consequently subject to taxation under Uganda’s tax laws. 

Following the assessment, URA issued a demand for payment exceeding 18.5 billion Shillings (US$4.92M). Nile Breweries challenged the assessment, maintaining that the products were exported through agents, including Ituri Investments Limited and Kabaco Uganda Limited, and should therefore remain tax exempt. 

The matter was initially heard before the Tax Appeals Tribunal, which ruled in favour of URA and directed Nile Breweries to settle the outstanding taxes. 

Dissatisfied with the ruling, Nile Breweries appealed the decision before the High Court. Before the appeal could be heard, the company filed an application in March 2026 seeking interim protection to prevent URA from enforcing the tax demand pending determination of the appeal. 

That application was dismissed by Justice Abinyo on March 9, 2026. 

Nile Breweries subsequently filed another application seeking a stay of execution of the Tax Appeals Tribunal ruling, again requesting the court to restrain URA from collecting the taxes. 

In her ruling, Justice Odongo held that the company was attempting to relitigate issues that had already been conclusively determined by a competent court. 

She stated that the earlier application had already been heard and determined by a court with authority to grant both temporary injunctions and stays of execution. 

“The dismissal of that application constituted a final and binding decision on Nile Breweries’ request for interim protection against URA’s enforcement actions,” Justice Odongo ruled. 

The judge further noted that although Nile Breweries argued there was a distinction between a stay of execution and a temporary injunction, the substance of the matter remained unchanged. 

She ruled that the central issue was whether URA should be restrained from collecting the UGX18.5 billion, an issue already substantially addressed in earlier proceedings before Justice Abinyo. 

Justice Odongo dismissed the application with costs, effectively clearing the way for URA to proceed with enforcement measures while Nile Breweries’ substantive appeal remains pending before the High Court. 

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