A Kenyan-based hotel, Golden Leaves Hotels & Resorts (Kenya) Ltd, has petitioned the Tax Appeal Tribunal challenging Uganda Revenue Authority’s decision demanding Shs3.4 billion in Value Added Tax. The two companies claim that in 2002, Golden Leaves agreed to refurbish, furnish, equip and manage Sheraton Kampala Hotel. They claim the agreement provided that Golden Leaves was to act solely as agents of Apollo Hotel Corporation including for purpose of debts and liabilities.

They claim that Golden Leaves applied and obtained an investment trader status and paid input tax amounting to Shs1.8 b.
However, later when the petitioners discovered that Golden Leaves was not entitled to pay such tax, they asked URA to refund the money, which URA did. The two claim that on August 18, 2005, URA made a demand for Golden Leaves to return the said monies including interests and penalties on grounds that the same had been wrongly returned.

URA computations including all interests and penalties increased the figure to Shs3.4 b. The petitioners also claim that URA has issued a third party agency notice to their banks; Barclays, Standard Chartered and Stanbic, attaching Shs990,398,633 purportedly using the VAT Act. They contend that Golden Leaves, though registered as an investment trader, is not the owner of the hotel and shall therefore not be taxed after the renovation of the hotel.

Golden Leaves and Apollo Hotel Corporation, proprietors of Sheraton Kampala Hotel, jointly filed the case against URA.

By Kisibo Jackie
Uganda Hotel news