Freemasons must pay tax, court rules

The Tax Appeals Tribunal has dismissed with costs an application by the Freemasons in which they challenged a decision by Uganda Revenue Authority (URA) not to grant a tax exemption to them on grounds that it is not a religious institution of public character.

Freemasonry, a secretive members-only organisation, is said to be one of the oldest non-religious, non-political, fraternal and charitable bodies, according to UK media reports.

The group applied to be granted a tax exemption on grounds that it is not an institution of a public character. When URA rejected the application, the Freemasons objected but their objection was dismissed.

Court case
The group, which in Uganda has its head offices on Plot 18, Nakasero Road in Kampala, and “Registered Trustees of Freemasons Hall” are registered with the ministry of Lands as a Trust under the Trust Deed of Freemasons Hall, then filed a matter before the Tax Appeals Tribunal.

In the application, the group challenged the refusal to grant them tax exemption on grounds that it was not a religious entity. Mr Naur A.H. Thakkar, the group chairperson, also informed the tribunal that the organisation he leads does charitable activities such as donation of wheelchairs to Mulago hospital.

He added that his group does not have any income and does not make any profit. The group submitted that it qualifies to be an exempt institution under S. 2(bb) of the Income Tax Act.
In cross examination, he testified that the lodges, which URA wants to tax, comprise members of different religions and that they do not conduct marriages. He also testified that religion and politics are not part of their discussions and that women and children cannot be members of the freemasons. The group also informed the tribunal that each mason belongs to a lodge and that masons practice rituals and are taught designated behaviours and practices. They also submitted that it is an institution that believes in worship of a supreme being who is addressed as the architect of the universe.

But the tribunal rejected their pleas. “The applicant does not deny that it receives income from the lodges of the freemasons. The tribunal notes that the Freemans Hall is not an exempt item under the Income Tax Act. The applicant by hiring it obtained rental income. Under S. 5 of the Income Tax Act a tax shall be charged on every person who has rental income. The income received by the applicant in hiring the hall is liable to taxes under the Income Tax Act,” the tribunal chaired by Dr Asa Mugenyi ruled.

Court rules
The tribunal found that the group’s objectives are not “religious” or “charitable in nature”. “The Tribunal does not believe that a belief by various people in a supreme being is sufficient for them to be considered a religion. It could be one of the requirements but on its own does not create a religion,” the ruling read in part.

URA had submitted that the group is not an institution of public character, and is privately owned and managed by the Freemasons trustees among other things. Citing the example of ‘the Light of Africa’ Lodge, the tax body informed the tribunal that the group hires out the hall and that the accruing income should be taxed.