Shahil Investments Limited v Uganda Revenue Authority
Tax Appeals Tribunal, Application No. 82 of 2024. July to December 2025. Coram: Ms. Proscovia R. Nambi; Ms. Grace Safi; Mrs. Kabakumba Masiko.
Best Judgment Assessments · Duplication of Assessments · Cost of Sales in Calculating Profits · Input Tax · Proof of Invoice Trading · General Damages in Tax Matters
After raids, three audits and an investigation, a hardware distributor was assessed UGX 2.8 billion on estimated sales and alleged invoice trading.
The situation
Between 2018 and 2022 the Revenue Authority audited a hardware distributor three times, searched its premises and seized its records, then assessed VAT and income tax of UGX 2,786,178,077 on under-declared sales and alleged invoice trading. It rejected the objections for lack of documents, which it had seized.
How it was resolved
The Tribunal vacated the assessments. Teams had issued overlapping assessments for the same periods and double-counted bank deposits; whole branch records were discarded without a basis while every deposit was treated as a sale; income tax was charged on turnover with no allowance for cost of sales; and invoice trading was not proved, since the authority produced neither its investigation report nor EFRIS records, and had accepted the VAT returns concerned. Damages were refused for want of proven loss.
What a practitioner takes from it
An estimated assessment must still be rational and evidenced; ask for the working papers.
Income tax is on profit: insist on cost of sales.
If the Revenue Authority holds your records, say so in the objection.
What could change
One reconciled assessment per period, not one per department, would have avoided most of this case.