The Uganda Revenue Authority (URA) has secured a significant legal victory after the High Court overturned a Tax Appeals Tribunal decision that threatened to increase interest payments in a long-running dispute with rice importers. The case, involving more than UGX 14.54 billion in principal claims and an estimated UGX 13.09 billion in additional interest exposure, centred on whether the terms of a negotiated settlement could be replaced with a different interest arrangement.

At the heart of the dispute were agreements between URA and a group of rice importers, including David Natweta and six others. The parties had agreed to settle their differences under terms that provided for 6% simple interest rather than the 2% compound interest rate associated with certain statutory tax refund outcomes. The agreements were part of a broader arrangement intended to resolve the disputes without further legal battles.The disagreements resurfaced after the Tax Appeals Tribunal overturned the agreed interest arrangements and introduced a different approach to calculating interest. This decision significantly changed the financial implications of the original settlements, creating a potential additional liability of approximately UGX 13.09 billion.

URA challenged the tribunal’s decision, insisting that the negotiated terms should be respected.In its appeal, URA maintained that the consent agreements represented a deliberate compromise reached by both parties. The authority argued that the importers had accepted the agreed terms as part of a settlement under which their principal claims were paid. Changing the interest provisions after the agreement had been implemented, URA contended, would undermine the very arrangement that enabled the disputes to be resolved.The High Court ruled in favour of URA in Uganda Revenue Authority v David Natweta & 6 Others, Civil Appeal No. 0117 of 2026, overturning the tribunal’s decision. The ruling upheld the position that the agreed 6% simple interest rate formed part of the negotiated settlement and should not automatically be replaced by the statutory compound interest approach applicable to certain refund outcomes.

The judgment also draws attention to the importance of honouring agreements reached through negotiation. URA had made concessions to resolve the disputes, while the importers benefited from payment of their principal claims exceeding UGX 14.54 billion. The court’s decision reinforces the argument that settlement terms should be considered as a complete package rather than altered in a way that changes the balance of obligations accepted by the parties.Financially, the ruling is a major development for URA because it reverses the tribunal’s decision that had created the additional interest exposure. The estimated UGX 13.09 billion represents the potential increase associated with the disputed interest arrangement, rather than necessarily the amount of money directly recovered by the authority.

The final financial effect must therefore be understood in the context of the original settlements and the court’s decision.Beyond the immediate dispute, the outcome sends an important message to taxpayers, government agencies and other parties involved in negotiated settlements. Such agreements can provide a practical way of resolving complex financial disagreements, but their value depends on the parties respecting the terms they have accepted. For URA, the victory strengthens its position in this dispute and underscores the importance of protecting public resources while pursuing legally sound settlement arrangements.