KFC Uganda’s Losses allegedly amounts shs 16 billion since 2018

Kuku Foods Uganda Ltd, the company that runs KFC restaurants in Uganda, is in a serious tax fight. Since 2018, the fast-food franchise reported big tax losses, amounting to over Shs 16 billion. But after a detailed audit by the Uganda Revenue Authority (URA), that number was slashed to just Shs 8.3 billion. URA said Kuku Foods had undeclared income and expenses that didn’t qualify for deductions.

Trying to stop URA’s move, Kuku Foods went to the Tax Appeals Tribunal. They argued that these changes would damage their business, lower the company’s value, and make it hard to attract investors or compete in the fast-food market. They also feared it might affect their financial statements and future operations.

However, in a decision signed by Tribunal Chairperson Crystal Kabajwara and her team, the court said Kuku Foods failed to meet all the legal conditions needed to block URA’s adjustments. The panel believed the company did not show enough proof that it would suffer serious or “irreparable” harm if URA went ahead.

The Tribunal ruled that the changes made by URA wouldn’t stop Kuku Foods from submitting its own tax reports. Also, they disagreed with the claim that the company must restate its financial records right away. Blocking URA, the panel said, would interfere with the tax body's official duties.

One small win for Kuku Foods was the ruling on a 30% tax deposit that is usually required during such disputes. The Tribunal said this rule didn’t apply because the company wasn’t in a tax-paying position yet, so there was no tax amount to base that deposit on.

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The Tribunal decided that the legal costs would be settled after the main case is concluded, which is still ongoing.

Kuku Foods Uganda has exclusive rights to operate KFC restaurants across Uganda. It opened its first outlet in 2012 and now runs several branches in Kampala and nearby towns. It is part of a larger group that also runs KFC in Kenya, Rwanda, and Tanzania.

This tax battle is the biggest legal challenge the company has faced in Uganda. It comes at a time when the government is working hard to strengthen tax enforcement and make sure big companies pay their fair share.