Introduction

The Constitutional Court on the 2nd of May 2023 in the case of Centre of Public Interest Law (Petitioner) versus AG (Respondents) Constitutional Petition No. of 2016 ruled in favour of the Respondents stating that the actions of the Parliament amending section 21(1) of the Income Tax Act by inserting section 21(q) that exempts allowances of members of Parliament from being taxed is constitutional and does not contravene with Article 92, 93 and 79 of the Constitution of the Republic of Uganda. The Constitutional court ruled that the actions of Parliament were constitutional.

Background of the case.

Centre of Public Interest Law(CEPIL) filed this Petition brought under Article 137(1) and (3) of the Constitution of the Republic of Uganda and Rule 3 of the Constitutional Court(Petitions and References)Rules, S.I No.59 of 2005.The Petitioners alleged that the actions of the Parliament amending section 21(1) of the Income Tax Act by inserting section 21(q) that exempts allowances of members of Parliament from being taxed is unconstitutional and contravenes with Article 92, 93 and 79 of the Constitution of the Republic of Uganda. Therefore they proceeded to seek declarations to include that the actions of the Parliament be declared unconstitutional and also that the act of the respondents issuing contradictory legal opinions to the Parliamentary Commission on the same subject matter of taxability of allowances paid of payable to the MPs be also declared unconstitutional as it contravenes with Articles 119(3), (4) of the constitution. For clarity Article 92 and 93 state that

‘Parliament shall not pass any law to alter the decision or judgment of any court as between the parties to the decision or judgment’.93(a (i) and (b) Parliament shall not, unless the bill or the motion is introduced on behalf of the Government proceed upon a bill, including an amendment bill, that makes provision for any of the following the imposition of taxation or the alteration of taxation otherwise than by reduction;

The petition was supported by an affidavit deponed by Ms. Namugosa  Annet while the respondents in reply were also supported by an affidavit deponed by State Attorney in the  Attorney General’s Chambers.

Representation

This petition was represented by Mr.Jude Byamukama and DR. Busingye Kabumba as counsel for the petitioner, while the Respondents were represented by Principal State Attorney Mr Richard Adrole. The petition was before a coram of Justices JCC Elizabeth Musoke, Monica K Mugenyi, Fredrick Egonda-Ntende, Christopher Madrama with Justice Christopher Gashirabake who wrote the lead Judgment.

Consideration of the Petition.

From the affidavits of both parties, the following issues were raised for determination, whether there are any questions for constitutional interpretation? Whether the act of the MPs introducing, through the Income Tax (Amendment) Bill 2016, an amendment to section 21 (l)(q) of the Income Tax Act contravenes Article 92, 93 (a)(i) and (b), and 79 (1) of the Constitution? And lastly Whether the Respondent’s issuing of contradictory legal opinions to the Parliamentary  Commission  contravenes  Articles  119(3)  &(4)(a)  of  the constitution of the Republic of Uganda. In response, the respondents contended to all the issues raised.

In his judgment, Christopher Gashirabake decided to follow the principles in determining the constitutionality of a legislation, its purpose and effect must be taken into consideration as summarized by Mwondha JSC  David Tusingwire vs. Attorney General, [2017] UGSC 11. He resolved the first issue in affirmation with authority from in Ismail Serugo vs. Kampala City Council & Anor, Constitutional Appeal No. 2 of 1998 that was raised by the petitioners in their submissions, that It is not enough to allege merely that a constitutional provision has been violated. Thus prima facie there’s need for interpretation of the impugned sections by the Constitution.

On the second issue, his lordship concedes that the actual text of Article 92 prohibits legislation even if it is prospective legislation as long as it has the effect of altering a decision of judgment of Court. He adds that in order to determine whether the introduction of the impugned provision of the Income Tax Act, Cap 303(as amended) contravenes Article 92, two aspects ought to be considered, ‘Whether the provision has retrospective effect and whether the provision alters the judgment of the High Court Commercial Division (Adonyo, J) in Civil Suit No. 745 of 2013; Byamugisha vs.

Attorney General and 2 others. ’. He asserts that High Court judgment was merely interpreting the law as it then stood and that Parliament has the mandate under Article 79(1) to make laws on any matter, including introducing changes to the existing law. The High Court Judgment did not create any obligation on Parliament not to change the tax regime. He concluded therefore that the impugned legislation was not retrospective.

On the last issue, the petitioners argued that Attorney General’s chambers actions of issuing contradicting legal opinions on a matter of public importance, is inconsistent with Article 119(3) and (4) (a) of the constitution. The Attorney General has made previous opinions on related matters on 29th March 2005 on “Taxation of Allowances for Members of Parliament” and on 18th October 2005 on “taxation of 20 million shillings Transport facilitation of members of parliament. ” a third opinion on 16th May 2007 vide “Legal Opinion on Payment of P.A.YE on Parliamentary Allowances” concluding that the said allowances are liable for P.A.Y.E. On 15th January 2008  a  fourth  opinion  vide  “Legal  Opinion  on  payment  of  P.A.YE Parliamentary Allowances” which drew a different conclusion that the allowances to the staff of the Parliamentary commission are exempt from PAYE

His lordship resolves this issue with reference to the Letter of the Attorney General submitted stating that there was no contradiction in the letter since the Attorney General reconciles all the four opinions and states his position. He adds that the submissions of the counsel of the petitioner seemed to attack the correctness of the position of the Attorney General concerning the taxation of Members of Parliament.

Conclusion

The Constitutional Court of Uganda with full coram lead by Justice Christopher Gashirabake dismissed the Petition with each party bearing their own costs as the petitioner acted in public interest. It ruled that the actions of parliament were constitutional.

By: Alinda Rachel