THE INCOME TAX (DISTRAINT) (Amendment) Rules, 2008
L.N. 6/1974 LN NO. 83 of 13 June 20081. These rules may be cited as the Income Tax (Distraint) rules.
2. In these Rules, unless the context otherwise requires -
"distrainee" means the debtor named in an order;
"distraint agent" means a person appointed as a distraint agent under rule 3;
"distress" means a distress levied pursuant to an order;
"distress debt" means the amount of tax, and interest charged thereon, specified in an order;
"distrainor" means an officer in the service of the Income Tax Department who is authorized to levy distress;
"goods" means movable property of a distrainee (other than growing crops and goods which are liable to perish within ten days of attachment) which is liable under the law to attachment and sale in execution of a decree of a court;
"order" means an order issued by the Commissioner under section 102 of the Act.
3. The Commissioner may appoint distraint agents to assist distrainors in the execution of orders, but no person shall be appointed a distraint agent unless he satisfies the Commissioner -
- (a) that he is of good repute and financial standing;
- (b) that he is qualified under the law relating thereto to levy distress by way of attachment of movable property in execution of a decree of a court; and
- (c) that he has contracted a policy of insurance in an adequate sum against theft, damage or destruction by fire of goods which may be placed in his custody by reason of the performance by him of his duties as a distraint agent.
(2) If a distraint agent is convicted of an offence involving fraud or dishonesty in connection with the functions performed by him as an agent, the court by which he is convicted may make an order as to the forfeiture of the security or part thereof furnished by him under paragraph (1), and the provisions of the Criminal Procedure Code, in so far as they relate to forfeiture of recognizances, shall apply mutatis mutandis to the forfeiture of security under this rule.
5. (1) An order may be executed at any time after it has been duly served on the distrainee in the manner provided by rule 6.
(2) An order shall be executed by attachment of such goods of the Distrainee as, in the opinion of the distrainor, are of a value which, on sale by public auction, would realize a sum sufficient to meet the distress debt and the costs and expenses of the distress incurred by the distrainor.
6.(1) An order shall be issued by the Commissioner in duplicate and service thereof shall be effected by service by the distrainor of a copy of the order on the distrainee in person or, if after using all due and reasonable diligence, the distrainee cannot be found, by service of a copy of an agent of the distrainee empowered to accept service, or an adult member of the family of the distrainee who is residing with him.
(2) A person served with a copy of an order under this rule shall endorse on the order an acknowledgement of service and if that person refuses to make endorsement the distrainor shall leave the copy of the order with that person after stating in writing thereon that the person upon whom he served the order refused to sign the acknowledgement and that he left, at the time, date and place stated therein, a copy of the order with that person and the name and address of the person (if any) by whom the person on whom the order was served was identified, and thereupon the order shall be deemed to have been duly served. Legal Notice 73 2000(15.6.00)
(3) Deleted by LN 83 of 13 June 2008
7.(1) In executing distress the outer door of a dwelling-house shall not be broken open unless that dwelling-house is in the occupancy of the distrainee and he refuses or in any way prevents access thereto, but when the distrainor executing distress has duly gained access to a dwelling-house he may break open the door of any room in which he has reason to believe goods of the distrainee to be.
(2) Where a room in a dwelling-house is in the actual occupancy of a woman who, according to her religion or local custom does not appear in public, the distrainor shall give notice to that woman that she is at liberty to withdraw, and after allowing reasonable time for her to withdraw and giving her reasonable facility for withdrawing he may enter that room for the purpose of attaching goods therein, using at the same time every precaution consistent with these provisions to prevent their clandestine removal.
Legal Notice 73 2000(15.6.00)
8. As soon as practicable after the attachment of goods under these Rules, the distrainor or distraint agent shall -
- (a) issue a receipt in respect thereof to the distrainee;
- (b) forward to the Commissioner a report containing an inventory of all items attached, the value of each item as estimated by the distrainor, the address of the premises at which the goods are kept pending sale, the name and address of the distraint agent in whose custody the goods have been placed and the arrangements, if any, made or to be made for the sale by public auction of the goods on the expiration of ten days from the date of attachment.
10. Immediately after the completion of sale by public auction of goods attached under these Rules, the distrainor shall make a return to the Commissioner specifying the items which have been sold, the amounts realized by the sale and the manner in which the proceeds of the sale were applied.
11.(1) Where a distrainee has, within ten days of attachment of his goods, under these Rules, paid or given security accepted by the Commissioner for the whole of the tax due from him together with the whole of the costs and expenses incurred by the distrainor in executing the distress, the distrainor shall at the cost of the distrainee forthwith restore the attached goods to the distrainee and return the order to the Commissioner who shall cancel it.
(2) A sum paid by a distrainee under this rule shall be applied by the Commissioner first in settlement of the costs and expenses incurred by the distrainor and as to the balance, if any, in settlement of the distress debt or such part thereof as the Commissioner shall direct.
12. Where goods attached under these Rules include livestock, the distrainor may make appropriate arrangements for the transport, safe custody and feeding of the livestock and any costs expenses incurred thereby shall be recoverable from the distrainee under rule 9 or 11, as the case may be, as costs and expenses incurred by the distrainor.
13. In addition to a claim for other costs and expenses which may be incurred by the Commissioner or the distrainor in levying distress under these Rules there may be claimed by the distrainor and recovered under rule 9 or 11, as the case may be, costs at the rate specified in the Schedule.
14. The maximum rates of remuneration which a distraint agent shall be entitled to demand from the distrainor for his assistance in executing a distress under these Rules, and which may be recovered by the distrainor under rule 9 or 11, as the case may be, shall be those specified in the Schedule.
15. The maximum rate of commission to be paid to an auctioneer by the distrainor as remuneration for his services for the sale by public auction of goods attached under these Rules, and which may be recovered by the distrainor under rule 9, shall be five per cent of the amount realized on the sale, and where an auctioneer has also rendered services as a distraint agent, he shall be entitled, in addition to a commission under this rule, to remuneration for those services as provided in rule 14.
16. The rates of remuneration specified in the Schedule shall be deemed to include all expenses of advertisements, inventories, catalogues, insurance and necessary charges for safeguarding goods attached under these Rules.
Schedules
RATES OF REMUNERATION
1. Distrainor’s Charges
Where no distress is levied and distress debt and any costs and expenses incurred by the distrainer are paid by the distrainee on demand or within thirty minutes thereafter the distrainee shall pay the distrainor the following costs –(a) Where the distress debt does not exceed Shs 3,000
- Shs 300
- Shs 120
2. Distraint Agent’s Charges
(a) Where no distress is levied and the distress debt and any costs and expenses incurred by the distrainor are paid by the distrainee on demand or within thirty minutes thereafter the distraint agent shall be entitled to a remuneration of- Shs120
(i) does not exceed Shs 30,000
- four per cent thereof
- three per cent thereof
(d) For keeping possession of any attached goods after the expiration of ten days from the date of attachment for each day, or part thereof -
- ¼ per cent of the value of the goods with a maximum of shs.60
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