COSASE Querries UGX600bn Tullow Oil Tax Waiver

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In short
The committee members noted that during the hearing several Civil Society Organizations-CSOs hinted on the settlement between Tullow oil and government in which, the oil firm was allowed to pay USD 250M as a capital gains tax instead of the previous assessment of USD 407M.

The Committee on Commissions, Statutory Authorities and State Enterprises-COSASE has decided to investigate a tax waiver of the USD 157 (about Shillings 600 billion) granted to Tullow oil. The Committee announced the move during a meeting with officials from Uganda Revenue Authority-URA led by the Commissioner General, Doris Akol.



 
The officials had appeared to respond to several queries raised during investigations into the Shillings 6 billion bonuses paid out to 42 government officials in appreciation for their role on the Heritage Oil and Gas arbitration case. 



The committee members noted that during the hearing several Civil Society Organizations-CSOs hinted on the settlement between Tullow oil and government in which, the oil firm was allowed to pay USD 250M as a capital gains tax instead of the previous assessment of USD 407M.

 
The tax accrued from Tullow's farm down and subsequent sale of its assets to CNOOC and Total in 2011. However, Tullow appealed the tax assessment at the Tax arbitration tribunal and the International Center for Settlement of Investment Disputes.


 
Akol told the Committee member that they agreed to the tax waiver because Tullow's insistence on a clause in its production sharing agreements exempting it from the tax.
 

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However, Abdu Katuntu, the COSASE chairperson argued that the waiver was suspicious and needed to be investigated.

 
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The Committee also tasked Akol to explain Curtis, Prevost and Mallet, a US law firm received double payment from the Justice and Constitutional Affairs Ministry and Uganda Revenue Authority (URA).



 
The firm was hired by the Justice Ministry to offer legal advice on the Heritage Oil and Gas capital gains tax arbitration case. Although the Justice Ministry received close to 30 billion Shillings for the case, the committee discovered that URA applied for a supplementary expenditure of Shillings 2.5 billion to hire the same firm.
 
 

Akol explained that Curtis was only procured to handle the arbitration case in London and all matters of local nature were to be handled and paid for separately. She said that despite the fact that the proceedings were held in London, several matters were raised in the tax appeals tribunal in Kampala.
 

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About the author

Olive Nakatudde
Olive Nakatudde is a URN journalist based in Kampala. Nakatudde has been a URN staff member since 2013.

Nakatudde started out in journalism in 2009 with Dembe FM radio in Kampala. In 2012, Nakatudde joined Voice of Africa as a political reporter. She has been a photographer since her journalism school days at Makerere University.

Nakatudde is interested in good governance and public policy, which she reports on intensively from the Uganda Parliament. She is a keen follower of cultural affairs in Buganda Kingdom and covers the kingdom's Lukiiko (parliament). Nakatudde also reports on education and health.