The Parliamentary forum on oil and gas is putting up a petition to the European Union Parliament on the conduct of Tullow Oil, one of the oil exploration companies in Uganda.
Chaired by Lwemiyaga MP Theodore Ssekikubo, the legislators want to stop the activities of Tullow, a company that is contesting the capital gains tax accrued from the recent sale of its stake to Total and China’s CNOOC.
On Tuesday, Tullow sold its 66.7% stake worth US$2.9 billion to Total and CNOOC. With the completion of this process, it is expected that small-scale oil and gas production for the local power market will commence in 2013 from the Kaiso-Tonya area.
But in a new twist of events, the oil company has decided to contest the Tax calculations by Uganda Revenue Authority (URA). Although the company has paid US$141 million, URA requires US$472 million as tax from the sale of Tullow’s shares.
According to the Income Tax Act, if someone is not contented with URA’s assessment of the capital gains tax, they have to pay 30 percent of URA’s assessed figure and then take the complaint to the courts of law, or a tribunal.
Winfred Niwagaba, Ndorwa East MP says the practices of Tullow in engaging the Uganda Government are illegal because they defied parliamentary resolutions and the judiciary where a case had been going on. It is on this basis that the MPs are petitioning the EU parliament.
// Cue in: the practices are illegal
Cue out:....those companies.//
Ssekikubo notes that the deal between government and Tullow is landing the country into another scandal of giving money like in the case of Heritage Oil.
//Cue in: Now to our horror and shock
Cue out:....be robbed?//
Currently government is tussling it out with Heritage Oil in a London Court over similar tax disputes after the oil company sold out its stake to Tullow oil. The venture is costing Uganda up to 11 billion shillings.
Bugweri MP Abdu Katuntu sent a warning to government and the oil company saying they ought to prepare for a legitimate showdown through massive protests. He promises to outdo the walk to work protests for the sake of saving the oil resources in the country. The oil money, he says, should not be squandered by the oil companies.
Cue in: let nobody have doubt.....
Cue out:.....the war has just started.//
The legislators, however, deny being behind the letter read to the NRM caucus meeting by the President this week. The letter was addressed to the British Parliament demanding that Tullow oil be blacklisted.
The MPs urged civil society groups and individuals with similar interest to join and sign a petition that will be delivered to the EU parliament.
