You have often heard, and it is true, that only two things in life are certain- death and taxes. While it is obvious that government is a silent shareholder in every business and an unseen signatory to every transaction and therefore will want a portion of it; almost every time, how much of it or when it is due is often not as direct, which is why you need a good tax lawyer.
In fact with a good tax lawyer and proper tax planning, sometimes the certainty of taxes can be properly sized, deferred, reduced or gotten rid of all together. A good tax lawyer, spends most of their time trying to ease the financial burdens associated with taxes on their clients by making sure they pay, only those taxes they are supposed to pay, and only when they are due. Tax lawyers help their clients navigate the often highly technical statutes upon which the various taxes and tax laws are based; ensuring the best outcomes for their clients.
This is because, in most, if not all cases, tax laws are shaped to be in favour of the statutory tax body- in this case Uganda Revenue Authority (URA). Usually, URA’s interpretation of a particular law holds sway. Even when the interpretation of the law is hazy or there is a grey area, it is never in favour of the taxpayer- tax authorities will always want to take advantage of the haziness. In this case a good tax lawyer will often seek to challenge the status-quo through courts of law so that a judicial precedent is set which kind of acts as a referee between the tax authority and the taxpayer. Such is the privileged position of the tax authority that when such precedents are set; often the tax authority will go back to the minister, who through Parliament will have the law adjusted by parliament.
Let’s, for example, look at an application for a judicial review by AON Uganda Limited (HCT – 00 – CC – OS – 04 – 2008) in which following an audit by URA for periods between January 2003 to December 2008, AON had been slapped with a UGX4.3 billion tax bill. AON had appealed the assessment to the Commissioner-General that insurance brokerage services were VAT exempt at the time, but the Commissioner-General in her letter dated 22nd August 2008 upheld her officer’s findings that insurance brokerage services were not insurances services as such and therefore not tax-exempt.
AON hired the services of Birungyi, Barata, and Associates, who successfully convinced the judges that insurance brokerage services are insurance services too, as defined in Section 1 of The Insurance Act (Cap 213) and therefore exempted from VAT as set out in Section 19 of the VAT ACT. Justice Geoffrey Kiryabwire then gave an “order of certiorari quashing the decision the assessment No. KC/VAT/272/06/08 of the URA in so far as the VAT related to insurance.”
This ruling did not save AON UGX4.3 billion in tax arrears only, but it also saved many other insurance brokers who would have to suffer the same tax bills, both in the past and in the future.
See, how tax lawyers saved the day?
But yet, another big question arises- how do you tell a good tax attorney from a bad one?
Well, I am no lawyer nor a tax consultant myself but commonsense suggests that you may want to start with a tax law firm that everyone is running to- a tax firm that has handled more than 35% of all tax litigation in Uganda. You may want to trust a law firm that at any one time at the Tax Appeals Tribunal, handles nearly twice the amount of cases than any other law firm- a law firm with over UGX300 billions of ongoing lawsuits. You may also want to turn to a law firm that secured a victory for National Water and Sewerage Corporation in their UGX17 billion lawsuit against URA or the firm that floored URA lawyers at the Supreme Court, in the UGX36 billion court suit between URA and the Ruparelia Group.
That law firm is Birungyi, Barata & Associates.
The making of Uganda’s premier tax law firm
Started in 2003, Birungyi, Barata & Associates (BBA) in their profile, describe themselves as a “one-stop centre for Legal, Tax and Consultancy services” that employs “innovative, creative, idealistic and well-thought advice” that “enables clients to achieve their goals.”
The firm prefers to look at itself as “Game Changers” which is why their vision is “to be the leading provider of premier legal and tax services in Uganda.”
Altogether, the firm is home to over 13 Lawyers and Tax Associates with over 240 years of combined tax and legal experience. The firm has gotten recognition by local and international peers as well as by international legal ranking firms such as IFLR1000, Chambers and Partners, and Global Law Experts among others for its excellence in Tax and Legal Services.
A brainchild of two friends- Birungyi Cephas Kagyenda and Enoch Barata, the firm has cut itself a niche and a reputation in the market as a provider of “efficient, responsive, result-oriented and highly skilled legal and tax advisory services.”
Birungyi who heads the firm’s tax department is a consummate tax lawyer and perhaps the best tax expert in Uganda. Chambers and Partners, the global legal ranking firm, describes him as an expert who “has cultivated an impressive reputation in the Ugandan market as a very highly specialised and well-respected tax practitioner.”
Altogether Mr. Birungyi has over 35 years twofold tax experience- 20 as a taxman in government and 15 as a tax attorney in private tax practice, giving him a unique advantage over many other tax lawyers. He is arguably one of few tax attorneys in the country with such a binary experience.
He started at the Ministry of Finance in 1984 as an Inspector of Taxes, till 1991 when he crossed over to Uganda Revenue Authority (URA) following the curving out of the tax department from the ministry to form a standalone tax authority. At URA, he rose to become an Assistant Commissioner of Quality Assurance in the Domestic Taxes Department. He later became a Deputy Commissioner, Assurance- Domestic Taxes between 2002 and November 2004 when he quit to join BBA, having founded it a year before. He has been the Team Leader and Managing partner since January 2004.
While at URA and Ministry of finance, he represented Uganda in negotiations and drafting of various double taxation agreements for South Africa, India, Denmark, Mauritius, and Norway. He was instrumental in drafting the Income Tax Act 1997 in Uganda and the Tax Appeals Tribunal Act. At BBA, he specializes in taxation, commercial and corporate law, advisory and consultancy, energy and construction, dispute resolution, insolvency and employment law.
He is a Makerere University Graduate with a Bachelor of Laws. He also holds a Diploma in Income Tax Administration from the Institute of Public Administration and a Diploma in Legal Practice from Law Development Centre.
Over 240 years of combined experience in taxation law
Including Mr. Birungyi, the firm has perhaps the single biggest collection of tax experts, most of whom combine dual experiences with the taxman and private practice as tax attorneys.
Besides Mr. Birungyi, the firm has 3 other associates, each with over 30 years’ of dual experience in taxation.
One such is Twinomujuni George, who previously headed the audit section of corporate tax at URA and was in charge of quality assurance audits. He was also a member of the technical committee on domestic taxation. Another astute tax attorney at the firm, is Ngobi B. Jacob, an Associate with the firm since 2003. Before entering private practice, Jacob previously worked with URA for 14 years where he was part of the team that drafted the VAT Statute and VAT regulation as well as developed various tax audit manuals. Altogether he has over 30 years’ tax experience.
Robinah Lubwama Lutaaya another Associate Tax Consultant with the firm also worked at URA for over 14 years, rising to the rank of Tax Commissioner before moving to PriceWaterhouseCoopers where she worked as Tax Manager for nearly 9 years. Robinah has extensive experience on Uganda’s tax environment and practices and has dealt with a wide array of tax issues, ranging from compliance checks and due diligence assignments, VAT refunds, mergers and acquisitions, tax health check reviews, resolving URA tax disputes, in addition to tax planning for a range of clients. She has also provided tax advice to clients in various service sectors including telecommunication, Not-for-Profit Organizations, financial institutions, and the manufacturing industry.
How Stanbic Bank CFO Ronald Makata Blends Governance, Technology and Human Leadership to Drive PerformanceSo good is the BBA tax team at what they do that they have won several game-changing tax cases; so game-changing that in some of them, the tax law had to be amended for the taxman to catch up. These include:
- Successfully challenging, on behalf of National Water & Sewerage Corporation (NWSC) a tax assessment of over UGX 17billion on the corporation in the High Court of Uganda;
- Successfully litigating on tax exemptions for the Uganda Communications Commission in the sum of UGX. 53 Billion (about US $ 17 million);
- Successfully challenging and causing vacation of a tax assessment on losses amounting to around UGX400 bn carried over by Warid Telecom after merging with Airtel Uganda in the High Court;
- Successfully challenging and vacating corporation tax bill on Steel Corporation of East Africa by Uganda Revenue Authority amounting to USD6M;
- Successfully vacating and obtaining a refund for excise duty from URA, amounting to UGX56billion on behalf of Rock Petroleum & 10 other oil companies in the High Court;
- Currently, the firm is representing two oil companies in challenging taxation of two oil companies by URA in respect of withholding tax, PAYE and VAT amounting to UGX47bn and 143bn respectively;
Over and above tax litigation, the firm has done tax consulting for several local, regional and international entities, namely: GTZ, World Bank, International Finance Corporation, East African Community as well as several other consultancies on behalf several governments on the continent, including Uganda, Liberia, and Nigeria.
Banking, commercial and corporate law and insolvency department
But businesses do not exist to pay taxes alone; they actually exist to provide solutions to their clients. But in the daily course of business- it is important that all the legal T’s are crossed and the I’s dotted to ensure that every deal, every transaction is legally watertight. And sometimes, disputes will arise and mistakes will be made, which makes the need for either quick legal advice and or prompt commercial justice necessary to allow for business to proceed smoothly. For this, BBA also has a banking, commercial and corporate law and insolvency department.
Enoch Barata, a Senior Partner and co-founder of the firm, heads this department. With over 20 years’ experience, Enoch has advised top and reputable companies, banks, insurance companies, government ministries, public agencies, and multinational corporations both in Uganda and sub-Saharan Africa. He has represented various clients in complex corporate transactions, all aspects of finance and lending, due diligence, mergers and acquisition, insurance, and litigation.
He is a Finance and Financial Law trained lawyer from the Center for Finance and Management Studies at the University of London and has gained repute as a financial lawyer and has represented various clients in complex financial and corporate transactions.
The banking, commercial, and corporate law and insolvency department that he heads, has two major practices i.e. the Banking, Securities and Insurance function, and the Corporate and Commercial Services function.
Other firm practices include: employment and labour laws, investment advisory services, energy, intellectual property, land, and conveyance as well as advocacy, litigation and arbitration; company secretarial services, construction law, and immigration.
Some of the major transactions that Enoch and his team have participated in include:
- Advising a mobile phone operator in Uganda on the tax implications of a $100 million loan facility an international lender;
- Advising on investment tax incentives for Meera Investments Ltd in the sum of UGX36 Billion (US $ 18 million).
- Advising wealth management firm, BMO Nesbitt Burns Inc. and Canadian law firm Fraser Milner Casgrain LLP in corporate deals worth $3 million and $ 15 million transactions;
- Advising MIG International S.A on a $4m investment in Burundi for vehicle licensing system and production;
- The firm is also a transaction advisor to Sky Investments of Hong Kong in an ongoing $19m investment in the hotel industry as well as Canton Global Investments of Mauritius on a $25m for development of a five star global brand hospitality facility.
Game-changing precedents
Although it is not a written maxim- it is a well-known fact within the law circles that whereas good law firms win cases, the best, set precedents.
Simply put, a precedent is a principle or rule established in a previous legal case that is often relied on by judicial bodies in deciding either similar cases or cases with similar issues or facts.
For example, in AON Insurance v URA above, before the court decision, URA considered insurance brokers as persons not providing insurance services and therefore not VAT exempt as per the VAT Act. But the court win secured by BBA confirmed that the services of insurance brokers are indeed insurances services and therefore exempt from VAT and the clarity was consolidated by a legal amendment in 2009.
Another precedent set by BBA is in the Uganda Revenue Authority V. Speke Hotel (1996) Ltd (Civil Appeal No. 12 of 2008). Previously the URA had rejected the claim by Speke Hotel Group that tents imported by the hotel and used in hosting events such as weddings did not fall in the definition of hotel equipment. The High Court agreed with the Tax Appeals Tribunal that tents imported by hotels were exempt from import duty and VAT at the time of importation.
In Housing Finance Bank Ltd v. Uganda Revenue Authority (HCCS NO. 259 OF 2014) BBA successfully, on behalf of the bank, convincing the judges that issuing an agency notice by URA on a third party, simultaneously with a tax assessment without giving the taxpayer time to act on the notice as provided by the Income Tax Act- usually 45 days, was illegal.
In the Bank of Baroda v URA case, the court agreed with Bank of Baroda that management fees paid by the bank to its head office, although an imported service, was incidental to an exempt supply (banking service) hence no Vatable. This ruling has allowed most multinational financial institutions to operate with a degree of comfort since.
But perhaps, one of the major tax cases in which BBA was involved was the Commissioner-General (URA) v Meera Investments (Civil Appeal no.22 of 2007). URA had appealed a Court of Appeal judgment that held that a Commissioner General of URA can be sued in his/her own right and therefore did not have to be served the statutory 45 days’ notice.
BBA lawyers successfully convinced a Coram of 5 Supreme Court justices composed of Chief Justice Benjamin Odoki, John Wilson Tsekooko (RIP), Joseph Mulenga (RIP), George Kanyeihamba and Bart Katureebe that the Commissioner General of URA can be sued and that one did not require to serve her the 45-day notice to sue.
Founding of Firm
The firm was founded by Birungyi Kagyenda Cephas together with Enoch Barata in 2003. The firm started as Birungyi, Barata & Co. Advocates.
In 2016, the firm name changed to Birungyi, Barata & Associates with an addition of Jacob Ngobi, George Twinomugisha, and later Robinah Lutaaya Lubwama to the firm as Associates and their main focus is on Taxation.
The firm currently has two Partners, three Associates, four Associate Partners, two Senior Legal Associates, four Legal Associates, and One Legal Assistant.
BBA has been recognized by both Local and International firms for its efficiency and effectiveness like Uganda Law Society, East African Law Society, IFLR, Global Law Experts among others for its excellence in Tax and Legal Services.
With the developments and changes in the Ugandan industry mainly in IT, intellectual property, Construction Law, Arbitration, Oil and Gas, the firm has slowly and gradually expanded its areas of practice; continuously adapting to the ever-changing legal environment to always efficiently and effectively serve its clients by providing the best practical but foolproof legal advice to its client.
