There is no Boston in Uganda. This is not a History lesson. However, it does not harm to use a historical perspective to understand the relationship between the legislature and the imposition of taxes. The framers of the 1995 Constitution of Uganda thought it wise that the people’s representatives should be the most suitable persons to impose the taxes they should pay. So be it.   Where a power is vested in one arm of the government, another arm cannot usurp the said power unless it is legally provided for. This would infringe on the doctrine of separation of powers. It is the duty of the legislature to enact laws that impose taxes. Lord Wilberforce explained in Vestey v IRC [1980] STC 10 at 18 54 TC 503 at 581: “Taxes are imposed upon subjects by Parliament. A citizen cannot be taxed unless he is designated in clear terms by a taxing Act as a taxpayer and the amount of his liability is clearly defined.”

This approach was echoed by his Lordship Madrama in Kampala Nissan Uganda Limited V Uganda Revenue Authority Appeal 7 of 2009, [2011] UGHC 80, where he stated: “For emphasis I need to state that no tax can be imposed except under the authority of an Act of `Parliament neither can an authority waive tax except under a law enacted by Parliament.” In Heritage Oil and Gas Limited v Uganda Revenue Authority Civil Appeal 14 of 2011, Her Lordship Obura said that: “Article 152(1) of the Constitution of Uganda provides that no tax shall be imposed except under the authority of an Act of Parliament. The ITA and other tax statutes specify the taxes payable and the URA is mandated to collect those taxes.” It cannot be doubted that powers to make tax laws are vested in the legislature. On the other hand, It is the duty of the executive to collect the said taxes and use the said taxes in the administration of public affairs. There would be a conflict of interest if the executive was to impose taxes, collect them and use them. It might get carried away with the so much power that would be vested in it. In order to avoid this, the constitution left the power to levy taxes with Parliament.

If the Parliament confers on a minister or the executive arm of government powers to grant or waive a tax, it has to expressly provide for it in an Act of Parliament. This authority under the ITA is bestowed on the Minister of Finance who has to report to Parliament on waivers or variations in taxes. The Tribunal has not come across any Act of Parliament where the Minister of Energy and Mineral development is given powers to grant tax exemptions.   The applicants argued that the GOU exercises powers which pre-date Uganda’s constitution or expressly conferred by the constitution. The applicants submitted that such pre-written constitution powers include a power to grant exemption from tax (the “PC Exemption Power”). The Tribunal agrees with the applicants’ citation of Article 274 of the Constitution that laws existing before the coming into force of the Constitution were not affected by it and could be construed with modifications, adaptations and qualifications as to bring them in conformity with the Constitution. The Tribunal also agrees that existing laws mean both written and unwritten law. The Tribunal also agrees with the respondent’s citation of Attorney General v Osotraco Ltd. Civil Appeal No. 32 of 2002, [2005] UGCA 1 where the court noted that Article 274 of the Constitution: “… only empowers all courts to modify existing unjust laws without necessarily having to refer all such cases to the Constitutional Court.

This provision enables the court to expedite justice by construing unjust and archaic laws and bringing them in conformity with the constitution, so that they do not exist and are void.” However the applicants have not cited any authority nor adduced any evidence to show that the President had powers to grant tax exemptions before the coming into force of the 1995 Constitution and that such powers survived its promulgation. The applicants merely argued that “simply because there is no express provision providing for a power to grant an exemption from tax does not mean that such a power does not form part of the President’s executive authority”  If such powers of the executive to impose tax exist they would be mythical. Such an assertion is based on speculation. Also the use of extra statutory materials advanced by the applicants on the derivation of the said powers from ancient common law prerogatives of the Crown are not useful aids in showing the source of the purported President’s powers.

The applicants did not cite any authority to show under which common can the Crown derives the power to grant any tax exemption. The applicants also argued that the Minister could sign under other powers conferred by the Constitution. The applicants relied on Objective IX – the right to development, and Objective XI (ii) – stimulation of industrial development by adoption of appropriate policies. The objectives of the 1995 Constitution merely state the framework under which the Constitution will operate. A perusal of the said objectives does not show any grant of tax exemption. Similarly, the applicants’ reliance on Articles 2, 99, 111 and 113 of the Constitution do not show any powers of the executive to grant tax exemptions.

In Attorney General v Malalu Musene Wilson and others Constitutional Appeal No. 7 of 2005 the constitutional court was of the opinion that “had the framers of the Constitution wanted to confer a tax exemption on emoluments of judicial officers, they would have said so expressly.” As regards the exemption that was extended to judges, the court stated that: “We wish to add, however, for clarity that the Income Tax Act did provide for the Minister of Finance to grant a tax exemption to any person. The Cabinet did decide in 1991 to extend exemption from payment of tax to Judges.” The applicants do not argue that the Minister of Mineral and Energy Development was conferred powers under the ITA to grant exemption to any person, which is not the case. The applicants do not refer to any constitutional provision which explicitly allows the Minister to grant tax exemptions. In the absence of the Constitution conferring powers to any other arm of the Government or institution to impose taxes, it can safely be said that the authority to impose taxes vests only in the Parliament or as it so provides.

The Constitution does not expressly state that Parliament shall grant an exemption. However S. 23 of the Interpretation Act provides that: “Where any Act confers a power on any person to do or enforce the doing of any act or thing, all such powers shall be understood to be also given as are reasonably necessary to do or enforce the doing of the act or thing.” S. 2 of the said Act defines a person to include a body of persons corporate or unincorporate. Applying the Interpretation Act, if the Parliament has powers to impose taxes it also has the powers to waive them. He who has powers to appoint, has powers to disappoint. If one has powers to impose a tax, then the power to dispose off would be implied. Therefore Article 152 implicitly provides that Parliament has the powers to make laws granting exemptions or to empower persons to grant them.

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