By Spy Uganda
Kampala: In a significant legal development, the High Court in Kampala has invalidated the mandate of Kampala Capital City Authority (KCCA) and other local government bodies to impose double taxation on media houses operating within Kampala and up country.
In the ruling delivered on Tuesday 1 February 2024, the High court indeed concurred with Uganda Media Owners Association, a coalition for media entities in Uganda which had jointly sued the government and KCCA, vehemently contesting the imposition of double taxation on trading licenses.
In its comprehensive judgement, the High Court asserted that, while KCCA has the statutory authority to levy trade license fees from media houses operating radio and television stations within Kampala Capital City, subjecting these media houses to trade license fees is illegal and tantamount to taxation.
”Kampala Capital City Authority has a statutory mandate to to levy trade license fees from the plaintiffs (Media Houses) operating radio stations and televisions stations in Kampala Capital City. Subjecting the Plaintiffs(media Houses) to pay for a trade license under the trade(licensing amendment of schedule) instrument No.2 of 2017 that purports to license radios stations, televisions stations operating in Kampala Capital City and municipalities country wide is illegal and amounts to taxation ” reads part of the ruling
”The implication of this judgement is that media houses operating radio stations and television stations within Kampala Capital city are exempted from paying trade license fees to Kampala Capital City Authority. Media houses operating radio stations and television stations out side Kampala are exempted from paying trade license fees to the local governments or municipalities where they operate from” the ruling added.
Background Of The Court Battle
In may 2021 Radio One and 31media houses sued government KCCA, challenging the levied trade license fees that they say subject them to double taxation.
Through their lawyers, Ayigihugu and Company Advocates, the media houses under the Uganda Media Owners Association, asserted that it is unfair for the government to impose license fees on them, considering they already pay annual fees to the Uganda Communications Commission (UCC) even after previous court rulings deeming such actions illegal.
The media houses include Radio One, Akaboozi, Radio Simba, Basoga Baino FM, Digida, Buddu FM, Capital Radio, Hot 100.9 FM, Galaxy FM Limited, Signal FM, KFM and Dembe FM, Namirembe FM Limited, XFM, Bukedde FM, NBS TV, NBS Khodeyo and Open Gate FM.
The others include; Power FM, Sanyu FM, Touch FM, Spice FM, Voice of Kigezi, Super Station Inc Limited, Radio City, Voice of Toro, Vision Radio, Radio Pacis Liberty FM Limited, Crooze FM, Voice of Kamwenge, BBS TV, NTV Uganda and Uganda Media Owners Association.
According to the KCCA grading system, radio stations in Kampala face trading license fees ranging from Shs 300,000 to Shs 1.5 million, while television stations with satellite connections are charged between Shs 390,000 and Shs 1.5 million annually.
In addition to these fees, the media outlets must also pay for commercial radio licenses to the UCC. The annual fees vary, with national radio stations paying Shs 7 million, Kampala-based FM radios contributing Shs 5.6 million each year, and those in other regions paying amounts ranging from Shs 4.2 million to Shs 3.5 million annually while community radios pay Shs 1.4 million in annual license fees.
Despite previous court decisions declaring such practices illegal, the media houses argued that they continue to receive demand notices for trading licenses from local governments which compelled them to seek clarification from the court regarding whether KCCA or the municipalities where they operate have the authority to enforce such levies.
Additionally, they questioned whether media entities operating in Kampala are entitled to a refund of payments made since 2017. The lawsuit contended that the amendment to the fee schedule was illegal, irrational, and constituted double oppressive taxation.
In the previous cases, most of which the decisions were delivered by justice Musa Ssekaana in 2020, the court held that once a company pays license fees set by the regulator, it is illegal to subject the same company to the payment of trading license fees in any part of the country.