On the 13th of February 2026, the Tax Appeals Tribunal reaffirmed a principle that many importers have long insisted upon, often in the face of steep and unexpected assessments: the price actually paid for goods remains the primary basis for customs valuation and cannot be disregarded without clear and lawful justification.
The decision in (Depo Limited v Uganda Revenue Authority, TAT Application No. 299 of 2024) arose from a dispute that mirrors the experience of many Ugandan businesses importing goods, particularly from markets such as China. Depo Limited, an importer of roofing materials, declared the value of its consignment based on invoices and telegraphic transfer records reflecting the actual purchase price. The Uganda Revenue Authority (URA), however, rejected that declared value, citing inconsistencies between invoices and payment timelines, and substituted it with a higher valuation derived from its internal database at a rate of USD 1.75 per kilogram. This resulted in an additional tax demand of over UGX 31 million.
Depo challenged the assessment, explaining that the perceived discrepancies were not indicative of undervaluation but arose from ordinary commercial arrangements. These included advance payments, consolidated settlements across multiple consignments, and supplier invoicing practices that did not always follow strict chronological order. The company supported its position with contracts, payment records, invoices, and correspondence demonstrating that the declared value represented the true transaction price.
The Tribunal accepted this explanation. It held that under the East African Community Customs Management Act (EACCMA), the transaction value, defined as the price actually paid or payable, is the starting point for customs valuation. Once an importer produces credible and verifiable documentation supporting that price, the evidential burden shifts to the tax authority to demonstrate why it should not be accepted. Suspicion alone, the Tribunal emphasised, is insufficient.
URA’s reliance on timing discrepancies between invoices and payments was therefore found inadequate, particularly where those discrepancies had been explained and aligned with the contractual relationship between the parties. The Tribunal noted that commercial realities in international trade must be taken into account and that such arrangements do not, without more, invalidate the transaction value.
A central issue in the dispute was the use of the fallback valuation method. The law prescribes a strict sequence of methods, beginning with the transaction value and moving through alternative approaches only where the preceding method cannot be applied. The fallback method sits at the end of this sequence and is intended as a last resort.
In this case, the Tribunal found that URA had not demonstrated that the earlier methods, such as valuation based on identical or similar goods, or the deductive and computed value methods, had been considered and ruled out. Instead, the authority appeared to have moved directly to the fallback method. This approach, the Tribunal held, was inconsistent with the statutory framework and therefore unlawful.
The Tribunal also addressed the use of database or reference pricing, making it clear that such figures are not recognised valuation methods under the law. While they may serve as administrative tools, they cannot replace the structured valuation process set out in the EACCMA. Any reliance on such data must be properly explained, adjusted for comparability, and linked to the specific goods being valued. A bare reliance on a database figure, without disclosure of its basis, does not meet this standard.
On procedural fairness, the Tribunal underscored the obligation on the tax authority to communicate not only the outcome of a valuation decision but also the method used and the reasoning behind it. This ensures that taxpayers are able to understand and, where necessary, challenge the basis of their tax liabilities.
Having found that the transaction value was unlawfully rejected and that the fallback method was improperly applied, the Tribunal set aside the reassessment. It directed that the customs value be recomputed in accordance with lawful principles, ordered a refund of any excess tax paid under protest, and awarded costs to the importer.
The implications of the decision extend beyond the parties to the dispute. For importers, it reinforces the importance of maintaining proper documentation and provides a strong basis for challenging arbitrary adjustments to declared values. For the tax authority, it is a clear reminder that customs valuation is governed by a structured legal framework rather than administrative discretion.
In a trading environment where predictability is critical, the ruling signals a return to principle: that customs valuation must begin with what was actually paid, and depart from it only where the law clearly permits.