The Uganda Revenue Authority (URA) has won a significant legal battle after the High Court overturned a Tax Appeals Tribunal ruling that threatened to inflate interest liabilities in a dispute involving rice importers. The judgment in Uganda Revenue Authority v David Natweta & 6 Others, High Court Civil Appeal No. 0117 of 2026, represents a major development in a case involving more than UGX 14.54 billion in principal payments and approximately UGX 13.09 billion in additional potential interest exposure.

The dispute arose from negotiated consent agreements between URA and the rice importers, who agreed to resolve their differences under specific financial terms. As part of the arrangement, the parties settled on 6% simple interest instead of the 2% compound interest associated with certain statutory refund outcomes. The agreements provided a framework for resolving the disputes, with the importers receiving payment of their principal claims under the settlement arrangements.

However, the agreements later became the centre of a legal confrontation when the Tax Appeals Tribunal set aside the negotiated interest terms and substituted a different arrangement. The intervention significantly changed the financial consequences of the settlements, potentially increasing the amount of interest payable by approximately UGX 13.09 billion. URA challenged the decision, arguing that the tribunal had altered terms the parties had already accepted as the basis for resolving their disputes.

The High Court subsequently allowed URA’s appeal and reversed the tribunal’s decision, upholding the authority’s position on the agreed interest arrangement. A central question was whether the statutory 2% compound interest rate could automatically displace the 6% simple interest terms contained in the consent agreements. The outcome supported the distinction between statutory interest applicable to certain adjudicated refund claims and interest terms arising from negotiated settlements.

The agreements reflected concessions made by both sides to achieve a resolution. URA agreed to abandon contested legal defences and accept the negotiated interest terms, while the importers benefited from payment of their principal claims exceeding UGX 14.54 billion. The authority maintained that these concessions formed part of a wider bargain and could not be separated from the settlement’s overall terms without undermining the agreement reached by the parties.

Financially, the ruling removes the additional interest exposure arising from the tribunal’s decision to replace the negotiated arrangement. The approximately UGX 13.09 billion figure highlights the scale of the potential liability that was at stake in the appeal. However, the estimated exposure should not automatically be treated as a confirmed cash saving, since the final financial effect depends on the liabilities established under the restored settlement terms.

Beyond the immediate tax dispute, the judgment highlights the importance of legal certainty in negotiated agreements. Businesses and public institutions rely on settlements to resolve contested matters, reduce litigation costs and establish predictable financial obligations. When agreed terms are subsequently altered, the consequences can extend beyond the parties involved, creating uncertainty over the enforceability of settlements and the financial risks attached to future negotiations.

For URA, the High Court’s decision marks an important victory in defending the terms of its negotiated settlements and protecting public finances from additional liabilities arising from the tribunal’s intervention. The case also offers a wider lesson for taxpayers, regulators and public institutions: negotiated agreements must be understood in their entirety, with the concessions and obligations accepted by both parties considered together. By overturning the tribunal’s decision, the High Court has restored URA’s position in a dispute where billions of shillings in potential interest were at stake.