Uganda's Parliament has asked the Attorney General to settle whether the Uganda Revenue Authority acted lawfully when it demanded revised excise duty from businesses for a period before the amended tax law took effect, according to NewVision.co.ug. The matter reached the floor on Tuesday, November 3, after Karim Masaba, the Industrial Division Mbale City MP, said some companies have had bank accounts frozen over taxes dating back to July.
Why it matters
The dispute turns on a clash between two ideas: the date written into a tax law and the long-standing principle that taxes should not apply to transactions that happened before the law existed. Businesses caught in the middle say they are being billed for a window when the revised rates were not yet on the statute book. How the Attorney General resolves that question will determine whether those demands stand, and it could set the tone for how Uganda handles similar commencement clauses in future tax legislation.
What lawmakers were told
Masaba told the House that URA is seeking additional taxes from oil marketing companies and sugar traders for deals made between July 1 and August 28, 2026. During that stretch, the Excise Duty (Amendment) Act, 2026 had not yet been signed or published. President Yoweri Museveni assented to the Act on August 20, and it appeared in the Uganda Gazette on August 28. Its commencement clause, however, sets the effective date at July 1, 2026.
According to NewVision.co.ug, Masaba said the authority issued tax demand notices and bank agency notices to the affected businesses, and that some accounts were frozen as URA moves to recover the extra revenue. He asked the Ministry of Finance to step in and direct the authority to pause enforcement until the legal position is clear, arguing that firms should not pay taxes for a period when the revised rates had not become law. He also urged the Attorney General to advise Parliament on when tax laws actually start to operate, pointing to the 2010 Rock Petroleum versus URA case, which dealt with the legality of retrospective excise duty collection.
Minister acknowledges the concern
Henry Musasizi, the Minister of Finance, Planning and Economic Development, told the House that Masaba had described the situation accurately but said URA was carrying out the legislation as Parliament passed it. The authority issued a public notice on September 23 telling taxpayers that the amended provisions applied from July 1 and asking them to review their July and August returns and declarations to reflect the new rules. Musasizi said URA was acting within its mandate to administer taxes in line with laws passed by Parliament.
He nonetheless voiced his own doubts about applying tax law backwards, describing a question of interpretation between the commencement date in the statute and the principle against retrospective taxation. "In my opinion, I don't think it is correct for tax laws to apply retrospectively," Musasizi told Parliament, as reported by NewVision.co.ug. He said the ministry had already written to the Attorney General for a legal interpretation and had a meeting with him set for Thursday, November 5. Musasizi asked the Speaker for a week to study the matter and report back to Parliament on Tuesday, November 10, after those consultations.
A separate complaint over dollar taxes
Joseph Ssewungu, the Kalungu County West MP, raised a different issue during the session, saying traders are being asked to pay taxes in US dollars on imported goods even though Parliament rejected dollar-denominated taxation. He argued that exchange-rate movements could add to the burden on traders who buy goods abroad and bring them into Uganda. Musasizi replied that this was a new matter needing its own consideration rather than part of the retrospective excise duty question.
The Finance Ministry is due to present its position on the excise duty dispute next Tuesday, after the scheduled talks with the Attorney General.
