{"id":28985,"date":"2022-04-01T17:28:15","date_gmt":"2022-04-01T17:28:15","guid":{"rendered":"https:\/\/www.africa-press.net\/uganda\/all-news\/bank-loses-bid-to-challenge-stamp-duty"},"modified":"2022-04-01T17:42:17","modified_gmt":"2022-04-01T17:42:17","slug":"bank-loses-bid-to-challenge-stamp-duty","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/uganda\/all-news\/bank-loses-bid-to-challenge-stamp-duty","title":{"rendered":"Bank loses bid to challenge stamp duty"},"content":{"rendered":"

Africa-Press – Uganda. <\/strong><\/span>Tax Appeals Tribunal has ruled that performance bonds, bank guarantees and advance payment bonds are security bonds because they apply where an institution undertakes to make good any loss, damage or liability incurred by a party caused by the issuer of the bond or by some other person\u2019s conduct.<\/p>\n

Performance bonds make a defaulting party accountable for its default enabling an aggrieved party to claim.<\/p>\n

According to the tribunal, a bank guarantees to pay a third party who is a beneficiary on breach of contract or default on performance by a party to the contract while advance payment bonds are meant to guarantee the proper and faithful performance of contracts and undertake to make good the payment of the advance payment in case of breach of contract.<\/p>\n

\u201cAn indemnity bond also allows for indemnity where there is a claim for loss but may not necessitate proof of loss. The parties do not go to court to prove the loss. The amount to be paid or limit is set at the time the bond is executed,\u201d the tribunal ruled.<\/p>\n

The three-member panel comprising of Dr Asa Mugenyi (chairperson), Ms Christine Katwe and Mr George Mugerwa (members) unanimously ruled that Stanbic Bank Holdings was liable to pay Shs6.3m to Uganda Revenue Authority (URA).<\/p>\n

\u201cAdvance payment bonds which assessed [Shs2.9b], performance bonds assessed [Shs2.6b] and generic guarantees assessed [Shs800m] were considered as indemnity bonds. Therefore, the total stamp duty payable by the applicant in respect of the said indemnity bonds is Shs6.3b,\u201d the panel ruled.<\/p>\n

Advance payment guarantees proper and faithful performance of the contracts and undertakes to make good the payment of the advance payment in case of breach of contract.<\/p>\n

Therefore, the tribunal ruled that advance payment bonds or security, or guarantees should be considered as indemnity bonds.<\/p>\n

However, it ruled that bid bonds are not indemnity bonds because they do not attempt to indemnify a third party against any loss or claim arising from a breach of contract.<\/p>\n

Therefore, the tribunal dismissed the bank\u2019s arguments that imposing stamp duty on the mentioned instruments may have serious economic implications, saying no evidence had been adduced.<\/p>\n

The ruling<\/b><\/p>\n

The ruling resulted from an application in which Stanbic Bank Holdings was challenging a stamp duty assessment of Shs950m arising from the determination of whether performance bonds, advance payment bonds, guarantees and bid bonds are liable to pay stamp duty.<\/p>\n

For More News And Analysis About Uganda<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Uganda. Tax Appeals Tribunal has ruled that performance bonds, bank guarantees and advance payment bonds are security bonds because they apply where an institution undertakes to make good any loss, damage or liability incurred by a party caused by the issuer of the bond or by some other person\u2019s conduct. Performance bonds make […]<\/p>\n","protected":false},"author":84,"featured_media":28984,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,8],"tags":[233,240,234],"class_list":["post-28985","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-homepage-english","tag-africa-press","tag-africa-press-uganda","tag-uganda"],"yoast_head":"\nBank loses bid to challenge stamp duty - Uganda<\/title>\n<meta name=\"description\" content=\"Tax Appeals Tribunal has ruled that performance bonds, bank guarantees and advance payment bonds are security bonds beca ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/uganda\/all-news\/bank-loses-bid-to-challenge-stamp-duty\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bank loses bid to challenge stamp duty\" \/>\n<meta property=\"og:description\" content=\"Tax Appeals Tribunal has ruled that performance bonds, bank guarantees and advance payment bonds are security bonds beca ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/uganda\/all-news\/bank-loses-bid-to-challenge-stamp-duty\" \/>\n<meta property=\"og:site_name\" content=\"Uganda\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2022-04-01T17:28:15+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-04-01T17:42:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/uganda\/sites\/34\/2022\/04\/img-624739604c6b0.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/bank-loses-bid-to-challenge-stamp-duty#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/bank-loses-bid-to-challenge-stamp-duty\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Bank loses bid to challenge stamp duty\",\"datePublished\":\"2022-04-01T17:28:15+00:00\",\"dateModified\":\"2022-04-01T17:42:17+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/bank-loses-bid-to-challenge-stamp-duty\"},\"wordCount\":423,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/bank-loses-bid-to-challenge-stamp-duty#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/uganda\/sites\/34\/2022\/04\/img-624739604c6b0.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Uganda\",\"uganda\"],\"articleSection\":[\"all news\",\"economy\",\"homepage-english\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/uganda\/all-news\/bank-loses-bid-to-challenge-stamp-duty#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/bank-loses-bid-to-challenge-stamp-duty\",\"url\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/bank-loses-bid-to-challenge-stamp-duty\",\"name\":\"Bank loses bid to challenge stamp duty - 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