Kuku Foods Uganda Ltd, the exclusive operator of the Kentucky Fried Chicken (KFC) franchise in Uganda, is locked in a high-stakes tax dispute with the Uganda Revenue Authority (URA), following years of reported financial losses and a contested audit.
Operating several outlets in Kampala and surrounding towns, Kuku Foods recently sought tax relief, citing operational hardships. However, the company’s request for exemption from tax payments and penalties was rejected by the Tax Appeals Tribunal.
Between March 2018 and February 2022, URA reassessed the company’s tax filings, slashing Kuku Foods’ declared losses from Shs16.8 billion to Shs8.3 billion.
According to URA, the franchise had underreported income and claimed non-deductible expenses. Kuku Foods disputes these findings, warning that the revised tax demands could cripple its operations.
The company argues that enforcement of the new tax liabilities could severely devalue its business, derail fundraising efforts, and limit its ability to compete in Uganda’s crowded fast-food market, where informal vendors offer similar products with far fewer regulatory constraints.
While URA maintains that its audit was thorough and justified, Kuku Foods insists that the financial burden could force it to scale back operations, cut jobs, and shelve expansion plans.
Kuku Foods states that the tribunal’s decision has left the franchise in a vulnerable position as it struggles to maintain business viability while meeting its tax obligations.
