Anthony Wesaka
23 December 2011
The Commercial Court, has thrown out a proposed new tax that was to be imposed on commercial banks, saving the sector additional operating costs in a tough economic environment.
The move follows a ruling by Justice Irene Mulyagonja, of the Commercial Court, who in her ruling said that banking businesses are exempted from the Trade License regime, because they transact business under the Financial Institutions Act, 2004.
The Judge said such fees amount to an unfair double payment.
“There is no way local governments can regulate activities of banking. Local councils don’t have the mandate to regulate financial institutions,” the judgment read in part.
The ruling also ordered the Attorney General – a respondent in the case, to pay costs incurred by the plaintiff.
Recently four banks including Stanbic, Barclays, Centenary, and Standard Chartered filed a joint application for judicial review before High Court that sought to bar government from implementing the proposed tax.
The government had in a public notice announced that banks classified under profession services would pay between Shs360,000 and Shs520,000 for each branch depending on location and size.
The notice said ATM facilities would be charged between Shs63, 000 and Shs180,000 annually effective January 1, 2012.
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