Kuku Foods Uganda Ltd, the franchise holder for Kentucky Fried Chicken (KFC) in Uganda, is embroiled in a heated tax dispute with the Uganda Revenue Authority (URA), a clash that could have significant implications for the country’s fast-food sector.
The row stems from a contested tax audit conducted by URA, covering the period between March 2018 and February 2022. During this period, Kuku Foods had declared financial losses totaling Shs16.8 billion.
However, following a reassessment, URA reduced these reported losses to Shs8.3 billion, accusing the company of underreporting income and including non-deductible expenses in its filings.
Kuku Foods, which operates multiple KFC outlets across Kampala and surrounding areas, strongly disputes the audit’s findings. The company recently applied for tax relief, citing operational challenges, but the Tax Appeals Tribunal rejected its request for exemption from tax obligations and associated penalties.
In a statement, the franchise warned that the revised tax demands could cripple its business, forcing it to scale back operations, delay expansion plans, and potentially lay off staff. “The financial pressure could significantly devalue our enterprise and hinder our ability to raise capital,” a company representative said.
The fast-food chain also raised concerns about the competitive disadvantage it faces in a market dominated by informal vendors, many of whom operate with limited regulatory oversight.
URA, meanwhile, maintains that its audit process was thorough and in line with statutory guidelines. Officials argue that tax compliance is essential for all businesses, regardless of size or affiliation.