Obiter dicta are Latin word which mean, thing said by the way this are judicial opinions

on point of low which are not directly relevant to the case in question. These are statements often made to clarify the legal principle which the judge proposes to apply in his or her judgment. It does not form a necessary part of the court's decision. Obita dictor can take the form of analogies illustration point of contrast or conclusion base on hypothetical situation. In reaching decisions, courts sometimes quote passages of obiter dicta found in the texts of the opinions from prior cases, with or without acknowledging the quoted passage's status as obiter dicta. A quoted passage of obiter dicta may become part of the holding or ruling in a subsequent case, depending on what the latter court actually decided and how that court treated the principle embodied in the quoted passage. Ratio decidendi is a ruling on a point of low in relation to a specific case and it bind and inferior court. In other words, ratio decidendi is a legal rule derived from, and consistent with, those parts of legal reasoning within a judgment The process of determining the ratio decidendi is a correctly thought analysis of what the court actually decided essentially, based on the legal points about which the parties in the case actually fought. All other statements about the law in the text of a court opinion pronouncements that do not form a part of the court's rulings on the issues actually decided in that particular case (whether they are correct statements of law or not)are obiter dicta, and are not rules for which that particular case stands which the outcome of the case depends.

In the case of crane bank versus commissioner general, bellow are issues that falls under obiter dicta. As far as the 1st issue is concerned, and in the view of the submissions by both sides, It is pertinent to state the long title of the People with Disabilities Act. It provides:-And part IXA of the Income Tax Act, Cap 340 makes special provisions for taxation of petroleum operations and is not relevant to the present case. Counsel for the Defendant quoted the case of Attorney General Vs Bugisu Coffee Marketing Association Limited Eagle Oil C. Ltd VS R (1946) A.C. 119 as follows:In a taxing Act, one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a Tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language use This court has carefully considered the submissions on both sides and is highly persuaded by the quoted passage from the Judgment of Slade J. in the case of Attorney General Vs Bugisu Coffee Marketing Association Limited. Emphasis was that as far as a taxing Act is concerned, there

should be no presumption and there is no equity about Tax. So one has to interpret the language used as fairly as possible. It is therefore important as far as this case is concerned to re-instate what a substantial year of income means Section 39 (I) of the Act provides:A tax payer may, apply in writing to use as a tax payer of income being a twelve month period other than a normal year of income and the commissioner may subject to subsection (3) by Notice in Writing, approve the application. In such circumstances, this court finds and holds that it would therefore be presumptuous and misleading on the part of counsel for the plaintiff to urge that the section should extend to apply to substituted years of income which fall within the entire year of 2008. To do so would be stretching the argument too far and would mean that the plaintiff benefits from the 15% deductions including the period when they had not yet employed the minimum 10 persons with disabilities. This court cannot accept such a misleading interpretation of the law by learned counsel for the plaintiff The next issue is whether the tax deduction is deductible before arriving at a chargeable income or is deductible after arriving at a tax payable. According to the submissions of Counsel for the plaintiff. Court is to follow the literal interpretation of first ascertaining all the payable tax and then deduct 15% of the total, such that the employer pays 85% of what should have been paid. A National Taxation body such as the defendant Uganda Revenue Authority. Uganda Revenue Authority requires the cooperation and good working relationship with all tax payers so as to effectively collect all taxes due in the interests of this country and the of the Civil Procedure Act, and as a gesture of reconciliation, I order that each party meets or people of Uganda. In such circumstances, and in view of this courts powers under S. 98 bears their own costs.

Issues that falls under ratio decidendi in the case of crane bank versus commissioner general I find and hold that the proper commencement date for the 15% tax deduction is 1st July 2008 for a normal year of income, and 1st January, 2009 for the plaintiffs substituted year of income. It is the therefore clear and plain that the plaintiff obtained the statutory number of a minimum of 10 persons for tax purposes under Act No. 2 of the 2008 by 28.12.2008. And on 9.12.2008 the plaintiff wrote claiming a tax deduction of 15 % as already noted. This court finds and holds that the Income Tax law as amended in 2008 made it clear that it is only Income Tax that is applicable. That tax relief is specifically granted in the income Tax Act and does not extend to value added tax, customs duty, excise tax or any other as the rest have
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their own laws and statutes like the Value Added Tax Act and the East African Customs Management Act. Sections 17 of the person with disabilities act was repealed by section 6 (f) of Act No. 2 of 2008 and therefore does not apply to the instant case. The income tax (Amendment ) Act No. 2 of 2008 does not cover years of income commencing 1st January 2008 but only years of income commencing 1st July, 2008 to 20th June 2009 and for purposes of the plaintiff who used a substituted year of income commencing 1st January to 31st December, 2009, each party bears its own costs. Obiter dicta in the case of unsilver Kenya limited versus commissioner of income tax. Unfortunately I do not have the benefit of the reasoning by the Local Committee and I am bound therefore to consider this appeal in terms of arguments advanced before me. I note that the Local Committee allowed an assumed Export Processing Programmed Office (EPPO) benefit at 5% for the year of income 1995 and www.kenyalaw.orgalso 5% for the year of income 1996. I have noticed that the very lengthy submissions made by UKL on guidelines adopted by other countries have been ignored by the respondent on the basis that these simply do not apply to Kenya. Now, these guidelines do not form the laws of the countries in question. They are simply guidelines, guiding the world of business that is business enterprises and the taxing authorities of those countries in arriving at proper Transfer Pricing principles for the purposes of computation of income tax. I am, therefore, unable to accept the argument that in view of the alleged clear wording of section 18(3) of the Act, no guidelines are necessary here in Kenya. That is rather simplistic, and devoid of logic. We live in what is now referred to as a global village. We cannot overlook or sideline what has come out of the wisdom of tax payers and tax collectors in other countries. And especially because of the absence of any such guidelines in Kenya, we must look elsewhere. We must be prepared to innovate, and to apply creative solutions based on lessons and best practices available to us. That is indeed how our law will develop and our jurisprudence will be enhanced. And that is also how we shall encourage business to thrive in our country. Therefore, I cannot ignore the time-tested experiences and best practices of others, in the argument that section 18(3) of the Act brooks of no ambiguity, and that it is unnecessary to look elsewhere. That would be too limiting an approach to take. I have no doubt in my mind that the OECD principles on income and on capital and the relevant guidelines such as Transfer Pricing principles, the CUP method adopted for calculations of what ought to be the income, the Cost Plus Return method as well as Resale Minus Method adopted for looking into compliance with arms length principles are not just there for relaxed reading. These have been evolved in other jurisdictions after considerable debates and taking into account appropriate factors to arrive at results that are equitable to all parties. The ways of doing
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modern business have changed very substantially in the last 20 years or so and it would be foolhardy for any court to disregard internationally accepted principles of business as long as these do not conflict with our own laws. To do otherwise would be highly short-sighted. Section 18(3) of the Act has used words and the course of that business is so arranged that .... The sub-section implies that the business so arranged must be such as to show less income to enable the tax authorities to challenge it. The respondent has submitted that this arrangement has been made deliberately to show lesser earnings. But is that really so? There is no evidence of tax fraud or tax cheating. The only evidence, material, is in regard to methods used for computation of tax. Use of different methods, so long as proper or lawful or rather not unlawful, is permissible and ought to be permissible so long as there is no fraudulent trading with a view to evading tax. I think the words I have just used makes the language of Section 18(3) of the Act somehow obscure and a tax payer is entitled to demand that his liability to a higher charge should be made out with reasonable clarity, before he is adversely affected. This is the dictum of Viscount Simon in Scott V. Russell (1948) 2 ALL E.R. 1 which dictum was applied with approval in the case of Kanjee Nazanjee v Income Tax Commissioner (1964) E.A. 257 at 262 H. Issues that falls under ratio decidendi in the case of Uniliver versus commissioner of income tax. I am unable to accept that the States guidelines are germane only to countries with double taxation guidelines. For example the very second item in the preface to OECD guidelines read: These issues arise primarily from the practical difficulty, for both MNES (Multinational Enterprises) and tax administrators, of determining the income and expenses of a company or a permanent establishment that is part of an MNE Group that should be taken into account within a jurisdiction, particularly where the MNE Groups operations are highly integrated. I need not repeat the contents of the said preface except to state that these do assist in cases like the present one. The respondents stand on section 18(3) of the Act is clear as I pointed out earlier. He says the sub-section is not ambiguous at all and must be read as literally as it is. Ordinarily a statute ought to be interpreted as per its wording if the wording is clear. But what when certain words or sentence is amendable to two interpretations? Was the course of business between UKL and UUL so arranged as to enable UKL to make no profits or less profit? I am unable to see such as arrangement. What when several possible methods are suggested almost worldwide to arrive at arms length prices for the purpose of taxation? In my view when the Act provides no guidelines or guidelines should be looked at. In this particular case my task is to decide whether UKLs business with UUL was so arranged as to show, deliberately, less profits. To consider this issue I take into account the fact that if UKL charged UUL prices such as applicable to other importers or customers obviously UUL would buy from elsewhere. I also take into account the fact that UUL has its own program for selling the products in Uganda for which it incurs expenses which
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expenses so far as UKL is concerned are saved. I do not smell any special price fixing agreement so as to evade tax. I am constrained to disagree with the respondents or the Local Committees method of arriving at arms length method for computation of tax and I have no alternative but to allow this appeal with costs with the result that the assessment in question is ordered to be annulled to the extent of tax levied by the respondent in accordance with section 18(3) of the Act arising from deemed profits from UKLs business with UUL in 1995 and 1996. It is further ordered that no tax shall be levied by the respondent in www.kenyalaw.org Accordance with section 18(3) of the Act arising from deemed profits from the business with UUL in 1995 and 1996. These are the orders of the court. As both Appeals, numbered 752 of 2003, and 753 of 2003 were consolidated by consent of the parties, this Judgment shall apply to both those appeals.