Uganda Revenue Authority v Crane Autos Ltd (in liquidation) and 5 others
High Court, Miscellaneous Cause No. 26 of 2024. 29 July 2024.
Five companies, one taxpayer
After an investigation began, a motor dealer went into liquidation and shares moved between related companies. The court treated all five as one.
The situation
The Revenue Authority claimed over UGX 20 billion in unpaid taxes from a motor dealer whose trucks were bought through its Dubai branch at marked-up prices, while management fees and bonuses were paid offshore without withholding. Four related companies shared owners, directors, staff and addresses; share transfers and a liquidation followed the start of the investigation.
How it was resolved
The High Court lifted the corporate veil. The five companies operated as a single economic entity designed to avoid tax; their assets were pooled to meet the tax debt, and the companies, directors and shareholders were made jointly and severally liable.
What a practitioner takes from it
Restructuring after an investigation starts will be read as an attempt to defeat the tax claim.
Directors and shareholders can become personally liable.