Yes. Section 24 (11) of the Tax Procedures Code Act, 2014 provides for ADR.

“A Taxpayer who is dissatisfied with the decision of the Commissioner may apply to the Commissioner to resolve the dispute using Alternative Dispute Resolution”.

The ADR Procedure is provided for under the Tax Procedure Code (Alternative Dispute Resolution Procedure) Regulations 2023, also referred to as the “ADR Regulations, 2023”.

Tax Decision: A tax decision means an assessment raised on the Taxpayer or a decision on any matter left to the discretion, judgement, direction, opinion, approval, satisfaction or determination of the Commissioner.

Settlement Agreement: A settlement agreement means an agreement between a Taxpayer and the Commissioner under which both parties agree to settle a tax dispute.

Commissioner: Commissioner means the Commissioner General of Uganda Revenue Authority.

Conciliation

This is the process where an independent conciliator is appointed or agreed upon by the Commissioner and the Taxpayer who facilitates communication between the Commissioner and the Taxpayer without offering an opinion on the merits of the arguments of either side.

Negotiation

This is the process where the Commissioner and the Taxpayer agree to hold discussions relating to the tax dispute through engagement in discussions and exchange of information in order to reach an amicable settlement.

All applications for ADR are evaluated to ascertain their eligibility to be resolved through the ADR mechanism.

The key considerations which also act as criteria include the foillowing;

• Whether using alternative dispute resolution procedure is likely to promote fairness, maximization of resources, and proper management of the tax system
• The cost benefits of litigation with respect to;

1. The prospects of success in the tribunal or court;
2. The prospects of success of collection of the amount due;

• The costs associated with the collection of the tax;

1. The costs associated with litigation.

• Whether there any complex, factual or quantum issues in contention
• Whether the settlement of the dispute will promote compliance by the Taxpayer; a group of Taxpayers or the business sector
• Whether the tax dispute is as a result of a miscommunication or misunderstanding between the commissioner and the Taxpayer.

The Commissioner shall reject an application to resolve the dispute under the ADR mechanism and inform the Taxpayer within 15 working days from the date of filing the application where;

1. The settlement is likely to contravene any law of Uganda
2. The matter in dispute is in regard to the interpretation of the law

• It is in the public interest to have the court or tribunal determine the tax dispute

1. There is evidence of deliberate or consistent non-compliance by the Taxpayer on the matter in dispute
2. The tax dispute relates to a case of an informer
3. An application is filed out of time; or

• The tax dispute involves fraud.

The ADR procedure takes four main forms are indicated below.

1. Preliminary

1. A Taxpayer who is dissatisfied with a tax decision of the Commissioner shall in writing within seven (7) days after being served with the tax decision apply to the Commissioner for resolution of the dispute using the form prescribed in the schedule to the Regulations.
2. In their application for ADR, the Taxpayer indicates their preferred method of ADR or indicates a proposal for settlement of the dispute.

• The Commissioner upon receipt of an application evaluates the application to ascertain that the application is eligible to be resolved through ADR.

1. Where the Commissioner is satisfied that the application is eligible for ADR, the Commissioner shall within seven (7) working days from the date of filing the application, invite the Taxpayer in writing to participate in the ADR procedure.
2. Where the Commissioner is satisfied with the Taxpayer’s application, the Commissioner shall invite the Taxpayer for a pre-alternative dispute meeting to determine the following: –
3. the costs of participating in the ADR procedure and the party to bear the costs;
4. the method to be adopted in the ADR procedure;
5. the timelines and schedule of the ADR proceedings;
6. the issues to be considered and resolved through the ADR procedure;
7. the terms and conditions to govern the ADR proceedings; and
8. any other matter relevant to resolving the dispute through the ADR procedure.

1. Conduct of the ADR Procedure
2. The parties to the ADR proceedings are subject to the condition to uphold and maintain decorum and confidentiality of the matter being handled under ADR.
3. During the ADR proceedings, the Commissioner may appear by himself or herself or by a tax officer or may be represented by an advocate. The Taxpayer may appear in person or through written authorized representation by a tax agent, an employee of the Taxpayer or an advocate.

• Each party is given an opportunity to present their case including calling witnesses whom the party wishes to rely on during the proceedings.

1. The agreement of the parties to settle the dispute shall be based on evidence submitted during the ADR proceedings.
2. Where for justifiable cause, a party fails to appear on the date of the ADR proceedings, the parties may schedule another date for the proceedings or close the ADR proceedings if it is appropriate to do so.
3. Where in the course of resolving a dispute, a matter arises which in the opinion of the parties requires specific expertise or competence, the parties may upon agreement call upon a subject matter expert to participate in the proceedings for the purpose of providing the required expertise.

1. Withdrawal from the ADR Proceedings
2. A party may at any stage of the ADR proceedings before arriving at a settlement by notice in writing withdraw from the proceedings on the following grounds: –
3. Where either party opts to withdraw from the proceedings or both parties mutually agree to terminate the proceedings;
4. If a party fails to attend two (2) consecutive sittings of the ADR proceedings;
5. Where the parties are of the opinion that the dispute cannot be resolved due to negative conduct by one or both parties;
6. Where both parties determine that a settlement cannot be reached; or
7. Any other ground that the Commissioner or Taxpayer considers reasonable.
8. Where the Commissioner or Taxpayer withdraws from the ADR proceedings, the ADR procedure shall be terminated. The decision of the Commissioner being objected to shall then be maintained against the Taxpayer unless if it is overturned by the Tax Appeals Tribunal or the Court.

1. Settlement Agreement
2. Where the Commissioner and the Taxpayer agree to settle the tax dispute using the ADR procedure, the issues agreed upon shall be set out in a settlement agreement which is signed by the Commissioner and the Taxpayer or by persons authorized to sign on their behalf.
3. Where the Commissioner and Taxpayer reach a settlement agreement to adjust the tax liability of the Taxpayer, the Commissioner may alter or amend the assessment for purposes of giving effect to the terms contained in the settlement agreement.

• The altered or amended tax assessment shall not be subject to an objection appeal to the Commissioner except: –

1. To correct an arithmetical error in the ADR decision;
2. To commence the execution or enforcement procedure;
3. To correct an error on the face of the amended or altered assessment;
4. To set aside the ADR decision; or
5. Where the content of the altered tax assessment is not in line with the terms and conditions of the ADR decision.
6. The settlement agreement shall be recognized as binding and enforceable against the Commissioner or Taxpayer as the case may be, like any other tax decision made by the Commissioner.
7. Where the settlement agreement provides that the tax liability of the Taxpayer be adjusted, the Commissioner shall within fourteen (14) working days from the date of signing of the settlement agreement amend the assessment to give effect to the terms of the settlement agreement.
8. Where the Commissioner or Taxpayer fails to comply with or violates a settlement, the Taxpayer or Commissioner may apply to court to enforce the settlement agreement.

Disclaimer

This information is strictly for guidance to our clientele and is subject to change on amendment of tax laws and any legislation governing tax administration