The High court has ordered telecom giant Airtel Uganda to pay Shs 1.1 billion to the Uganda Revenue Authority (URA) after losing a tax dispute over imported telecommunications equipment. In his ruling, justice Stephen Mubiru set aside a decision of the Tax Appeals Tribunal, which had earlier directed URA to re-evaluate the company’s tax obligations. The dispute arose from Airtel’s importation of a Broadband Processing Board (BPB), equipment used to manage high-speed data transmission, traffic switching and user access. Court records show that Airtel declared the value of the BPB Model N2 unit, supplied by Zhongxing Telecommunications Equipment Corporation, at $1,350 (about Shs 5 million). However, around the same period, another telecommunications company declared identical equipment from the same manufacturer at $10,200 (about Shs 38 million) per unit, raising suspicion over Airtel’s valuation. This discrepancy prompted URA to question the declared value and request additional documentation. Following a customs spot audit at Airtel’s warehouse, URA established that the equipment was identical and abandoned the transaction value method in favour of the “transaction value of identical goods” approach. The reassessment increased Airtel’s tax liability to Shs 1.1 billion for the consignment, although court records do not indicate the number of units involved. Airtel challenged the assessment before the Tax Appeals Tribunal, which ordered URA to reconsider the valuation using the company’s purchase receipt. However, Airtel also contested that ruling, arguing that the tribunal should have nullified the tax assessment entirely. In overturning the tribunal’s decision, justice Mubiru held that it erred by allowing Airtel to introduce new evidence, specifically the purchase receipt, that had not been provided when URA initially requested supporting documentation. He ruled that URA was justified in departing from the transaction value method after Airtel failed to substantiate its declared price at the time. The judge further held that the tax assessment remained valid despite procedural flaws in the tribunal’s handling of the case, noting that courts may uphold a tax liability where its substance is sound, even if technical errors arise in the process. The court also rejected Airtel’s explanation that the lower price resulted from a framework agreement between its parent company and the supplier, citing lack of documentary evidence to support the claim. Justice Mubiru emphasised that failure by an importer to provide required documentation allows tax authorities to apply alternative valuation methods to ensure fairness and prevent undue advantage. As a result, Airtel is required to pay the additional tax as assessed by URA.The post Airtel ordered to pay URA Shs 1.1bn in tax dispute appeared first on The Observer.