A Critical Analysis of Directors’ Personal Liability in Instances of Tax Evasion and Tax Offences in Uganda

Abstract

The legal status of a Company as a ‘separate legal entity’ presents opportunities for the shareholders and directors to actualise their business enterprises through a company without being personally liable for the liabilities of the Company. However, under specified circumstances, the directors may be personally liable on civil or criminal offences committed by the company. The approach is prevalent under tax law in the Turquand case, where the corporate veil is lifted in instances of tax evasion to expose the directors to personal liability. In Uganda, the Courts have been expressly empowered by statutory legislation to lift the corporate veil where the Company or directors are involved in acts of tax evasion or misappropriation of resources. The intention of the legislative intervention in this regard seems to align with the government’s efforts to combat tax fraud and tax crimes to improve the much-needed tax revenue collections. However, the statutory provisions and the exceptions to personal liability have some inherent limitations. In some instances, the exceptions are erroneous and vague.

Suggested citation

Oscar Kambona (2025). A Critical Analysis of Directors’ Personal Liability in Instances of Tax Evasion and Tax Offences in UgandaInternational Journal for Law & International Business Transactions, 1(1). https://doi.org/10.69798/91124737

Metric