Respect Court Orders & Stop Double Taxing Ugandans- AG Kiwanuka Orders KCAA, Other Local Gov’t Authorities To Stop Collecting License Fees From Pharmacies, Drug Stores

Respect Court Orders & Stop Double Taxing Ugandans- AG Kiwanuka Orders KCAA, Other Local Gov’t Authorities To Stop Collecting License Fees From Pharmacies, Drug Stores

By Spy Uganda

Kampala: The Attorney General, Mr. Kiryowa Kiwanuka, has instructed Kampala Capital City (KCCA) and other local government bodies to exclude pharmacies and drug stores from the list of businesses mandated to obtain trading licenses for operation.

This directive emphasizes the illegality of such inclusion, citing a violation of the National Drug Policy and Authority Act.

In a formal advisory dated 9 February 2024, addressed to the KCCA Executive Director, Chief Administrative Officers, and Town Clerks, AG Kiwanuka reiterated previous court rulings that pharmacies and drug shops should not be subjected to trade license fees, emphasizing the contradictions with the National Drug Policy and Authority legislation.

”The purpose of this advisory, therefore is to advise all local governments to comply with court rulings of the court not to demand and/collect trade licenses from the applicants who have been successful in courts of law, namely, pharmacies and drug stores licensed by National Drug Authority, law firms licenses by Law Council, Banks and financial institutions licensed by Bank of Uganda and forex bureaus and and money remittance businesses licensed by bank of Uganda” reads part of Kiwanuka’s advisory.

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”All persons and authorities are obligated to respect the decisions of the Court as per Article 128 (3) of the Constitution which stipulates that all organs and agencies of the State should accord to the courts such assistance as may be required to ensure the effectiveness of the courts, which includes the duty to respect Court orders” Kiwanuka added.

Background Of This Matter

On January 13, 2017, Amelia Kyambandde, who was the Minister of Trade, Industry, and Cooperatives at the time, issued Statutory Instruments 2017 No.2, known as the Trade (Licensing) (Amendment of Schedule) Instrument 2017, pursuant to Section 30(3) of the Trade Licensing Act, Cap. 101.

The new Amendment of Schedule introduced new businesses or traders that are required to pay trading licenses.

Some of the new businesses, traders, or institutions required to pay annual license included (i) Legal firms (number 17 on the schedule), (ii) Auditors account. Tax consultants (number 18 on the schedule), (iii) Surveyors, engineers, valuers (number 19 on the schedule), (iv) health centre ( 29), pharmacy (30); (v) Clinic (34) and (vi) Drug store (35) among others.

In response to these changes, the Uganda Law Society initiated a case in the High Court, Civil Division (Uganda Law Society v Kampala Capital City Authority and Attorney General), seeking to challenge the requirement for law firms to pay an annual license fee to operate.

Additionally, in 2019, the Pharmaceutical Society of Uganda (PSU) brought a case before the High Court, Civil Division (Pharmaceutical Society of Uganda vs Attorney General), seeking judicial review under rule 3 of the Judicature (Judicial Review) Rules, Section 98 of Civil Procedure, and Section 36 of the Judicature Act. The applicant sought five specific judicial review reliefs and orders, including the following two:

  1. An Order of Certiorari quashing the provisions of the Trade
    (Licensing)(Amendment) Act, 2017 and the Licensing fees
    indicated in item 30 and 32 of Part A of the schedule to the Trade
    (Licensing) (Amendment of Schedule)Instrument SI No. 2 of 2017
    on the basis that they make it mandatory for the applicant
    members to pay licensing fees to both Municipality and National
    drug Authority which imposes an unnecessary financial burden on
    the applicant.
  2. A permanent injunction and an Order of Prohibition, prohibiting
    and/stopping the respondent and/its representatives, local
    authorities or persons acting on their behalf from enforcing the
    provisions of the Trade (Licensing)(Amendment) Act, 2017 and the
    Licensing Fees indicated in Item 30 and 32 of Part A to the Trade
    (Licensing)(Amendment of Schedule) Instrument No. 2 of 2017.

In his ruling in May 2020, Judge Musa Ssekaana, the Kampala High Court ruled that the inclusion of pharmacies and drug stores in the requirement for a trading license is illegal and and violates the National Drug Policy and Authority Act.

Ssekaana also ordered that pharmacies are not ”supposed to pay trade license fees pursuant to item 30 and 35 of part A of the Trade ( Licensing) (Amendment of schedule) Instrument No.2 of 2017 “…and it [issuance of trading licenses] conflicts with the specific legislation. Where two legislations conflict between general legislation and specific legislation, the specific legislation overrides the general legislation on the subject matter,” he ruled in 2020.

Despite this ruling, drug stores and pharmacy operators continue to face demands for trading license fees from various local government authorities, including KCCA, sub-county, and division councils. These authorities persist in imposing such fees, even though these businesses already contribute a similar tax to the National Drug Authority (NDA).

Given the ongoing non-compliance with the court orders by local government authorities, the Uganda Pharmacy Owners Association sought the intervention of AG Kiwanuka to compel authorities to cease the practice of double taxation, as clearly instructed by the court. an accessible web community

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