Uganda court clears taxman to enforce $4.9 million tax demand against Nile Breweries

Uganda’s High Court has cleared the way for the country’s taxman, Uganda Revenue Authority (URA), to enforce an Ush18.5 billion ($4.9 million) tax demand against Nile Breweries Uganda Limited, dealing a setback to the brewer as its appeal remains pending.

The Commercial Division of the High Court dismissed with costs an application by Nile Breweries seeking to block the tax authority from collecting the disputed amount, which stems from a 2023 reassessment covering Value Added Tax (VAT) and Local Excise Duty.

Tax dispute over export claims

The dispute centers on URA’s determination that Nile Breweries owed Ush18.51 billion ($4.91 million) in taxes for the period between January and November 2022. The brewer argued that the goods in question were intended for export and qualified for exemption under Uganda’s zero-rated export regime.

However, URA concluded that the products were not specifically manufactured for export and were therefore subject to domestic taxation.

Nile Breweries, a major alcoholic beverage producer with export operations to regional markets including South Sudan and the Democratic Republic of Congo, maintained that the goods were exported through third-party agents such as Ituri Investments Limited and Kabaco Uganda Limited.

Tribunal ruling and legal challenge

The matter was initially heard by the Tax Appeals Tribunal, which ruled in favor of URA and directed Nile Breweries to settle the outstanding tax liability.

Dissatisfied with the outcome, the brewer appealed the decision before the High Court and sought interim relief to prevent enforcement while the appeal was being determined.

An initial application filed in March 2026 was dismissed by Justice Abinyo, prompting the company to file a second request seeking a stay of execution of the tribunal’s ruling.

Court rejects fresh application

In her ruling, Justice Odongo dismissed the application, holding that Nile Breweries was attempting to relitigate issues that had already been conclusively determined.

She noted that the earlier decision had addressed both temporary injunction and stay of execution requests, making it binding on the parties.

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

The court further held that the distinction raised by the company between a stay of execution and a temporary injunction did not materially alter the substance of the case.

Enforcement proceeds as appeal continues

Justice Odongo concluded that the core issue, whether URA should be restrained from collecting the Ush18.5 billion ($4.91 million), had already been substantially addressed in prior proceedings.

The application was dismissed with costs, effectively allowing URA to proceed with enforcement measures while Nile Breweries’ substantive appeal remains pending before the High Court.

The ruling underscores the increasing scrutiny by tax authorities across East Africa on compliance, particularly in cases involving export claims and tax exemptions.