The Nile Breweries-URA UGX 18.5 Billion Fight: When ‘Export’ Became the Battleground That NBL Eventually Lost A beer export model just cost Nile Breweries about UGX 18.5b. The Tax Appeals Tribunal ruled that ‘export agents’ Kabaco and Ituri were in fact local buyers, not agents, so their cross-border sales didn’t qualify as NBL exports. Labels aside, risk and title passing in Uganda proved legally decisive.

On paper, it looked like a clean regional trade story: a Ugandan manufacturer producing beer for thirsty markets in South Sudan and DR Congo, using local distributors to move product across borders.

In reality, it became a high-stakes tax dispute that turned on a single question: who, legally, exported the beer?

The business model behind the case was straightforward. Nile Breweries Limited (NBL) has long exported into the region.

In 2022, it supplied beer to Kabaco and Ituri, two Uganda-based companies with established export networks outside the country.

The beer was clearly marked “for export,” and the arrangement was framed as a principal–agent setup. NBL said the two firms were not buyers but export agents acting on its behalf.

Because exports are zero-rated for value-added tax (VAT), and excisable goods exported by the manufacturer can qualify for local excise duty remission, NBL treated the supplies as exports from the start.

That meant it did not charge 18% VAT on the consignments and expected no local excise duty to arise on them.

URA audited NBL’s 2022 records covering January to November and reached the opposite conclusion.

To URA, what mattered wasn’t the destination but the moment ownership and risk changed hands.

URA argued that Kabaco and Ituri paid ex-factory purchase prices, received delivery in Uganda, assumed risk once goods were handed over, and appeared as exporters on customs paperwork.

In URA’s view, this was a domestic sale first and an export later. Under Ugandan tax law, a local taxable supply does not transform into an export just because the buyer later ships it abroad.

On that basis, URA raised additional assessments totaling about UGX 18.5 billion in VAT and local excise duty combined.

NBL pushed back with three main lines of defence. First, it insisted the contracts were genuine agency deals, meaning Kabaco and Ituri exported NBL’s beer under export-agent agreements, and their exports should legally count as NBL’s exports.

Second, it relied on documentation showing the beer actually crossed borders, backed by customs entries and export forms.

Third, it argued legitimate expectation: URA had accepted similar export-agent structures in earlier years, so NBL believed the model remained valid and should not be reclassified retroactively.

Before deciding who was right on substance, the Tax Appeals Tribunal dealt with a procedural issue that proved costly for NBL.

In its 21 November 2025 ruling, the Tribunal noted that some objection appeals were filed outside the 30-day statutory window.

So, those specific assessments were struck out on jurisdictional grounds.

They fell away because of timing, not because NBL’s arguments succeeded.

On the remaining assessments, the Tribunal focused on substance over labels. It applied classic agency tests: a true agent does not buy goods for a purchase price, does not take title or risk, earns commission rather than resale profit, and binds the principal to third-party buyers.

The Kabaco and Ituri arrangements failed those tests. The agreements required payment per consignment at ex-factory prices, placed exporter-registration obligations on Kabaco and Ituri, barred them from representing NBL, and provided no commission structure.

In practice, the Tribunal said, the arrangement behaved like an independent purchase and resale model rather than agency.

The Tribunal reinforced its view by leaning on a prior High Court decision involving a similar NBL model, which had also characterized such structures as local sales.

With no material distinction, the Tribunal followed that precedent.

The outcome was blunt. The valid VAT and local excise duty assessments were upheld; only the time-barred portions were struck out, and costs were awarded to URA.

For manufacturers and exporters, the ruling draws a bright line. When a Ugandan entity pays a price, takes delivery, and assumes risk inside Uganda, tax law will treat that transfer as a local sale, even if the goods later leave the country.

In cross-border trade structures, the economics of the transaction matter more than the title printed on the contract.